Sellers' Pay-for-Ranking Strategies on Platforms

Digital platforms shape users' choices and opinions through the ranking of the displayed items, the top-ranked ones being more likely to be considered than the next ones. While we expect the ranking to be based on some sort of relevance, there is a suspicion that platforms could alter their ranking to promote some content for financial or economic reasons, among other possibilities. We consider a model of a ranking platform implementing revenue-maximizing rankings, and analyze the strategy of sellers paying to be ranked higher for a better exposition, thereby increasing sales. We investigate the impact of such strategic behaviors on revenues, overall click rates for all actors, and global relevance perceived by users.