'The equalizer': Measuring and explaining the impact of online communities on consumer markets

Our objective is to examine how online communities affect the functioning of markets for durable goods with particular emphasis on markets that are both fragmented and diverse. Our thesis is that online communities have the potential to make relatively inefficient fragmented markets more efficient. This effect will manifest itself through the observed pricing for the goods in both standard commercial settings and in internet exchange institutions. A secondary effect of the online communities should be to amplify the impact of quality (as perceived by the user) on market transactions. We conclude with an analysis of the foundations of credibility for user-generated content within online communities. © 2010 Macmillan Publishers Ltd.