Promotional Reviews: An Empirical Investigation of Online Review Manipulation

Abstract

Firms' incentives to manufacture biased user reviews impede review usefulness. We examine the differences in reviews for a given hotel between two sites: Expedia.com (only a customer can post a review) and TripAdvisor.com (anyone can post). We argue that the net gains from promotional reviewing are highest for independent hotels with single-unit owners and lowest for branded chain hotels with multiunit owners. We demonstrate that the hotel neighbors of hotels with a high incentive to fake have more negative reviews on TripAdvisor relative to Expedia; hotels with a high incentive to fake have more positive reviews on TripAdvisor relative to Expedia. (JEL L15, L83, M31)User-generated online reviews have become an important resource for consumers making purchase decisions; an extensive and growing literature documents the influence of online user reviews on the quantity and price of transactions. 1 In theory, online reviews should create producer and consumer surplus by improving the ability of consumers to evaluate unobservable product quality. However, one important impediment to the usefulness of reviews in revealing product quality is the possible existence of fake or "promotional" online reviews. Specifically, reviewers with a material interest in consumers' purchase decisions may post reviews that are designed to influence consumers and to resemble the reviews of disinterested consumers. While there is a substantial economic literature on persuasion and advertising (reviewed below), the specific context of advertising disguised as user reviews has not been extensively studied.The presence of undetectable (or difficult to detect) fake reviews may have at least two deleterious effects on consumer and producer surplus. First, consumers who 1 Much of the earliest work focused on the effect of eBay reputation feedback scores on prices and quantity sold; for example, Resnick and Zeckhauser (

The Logic of Collective Rating

“…Previous empirical analysis of social dynamics focusses on initial ratings [27][28][29], the main aggregate finding being negative trends, suggestive of initial fake reviews [12][13][14]. In our data, the initial average vote is 4.35, compared, for example, with 3.89 for the 61st and 4.44 for the 277th votes.…”

“…Across different types of products and online sales platforms, rating mechanisms have been shown to improve sales [1][2][3][4][5][6][7][8][9][10] and consumer satisfaction [11], despite the issue of fake/manipulated reviews [12][13][14]. From the point of view of the consumer, understanding the representativeness of ratings is key.…”

Fiabilidad de las críticas hoteleras autenticadas y no autenticadas: El caso de TripAdvisor y Booking.com

“…Destacan las webs de viaje 2.0, que son webs en las que además de obtener información, el usuario puede proporcionar información a los demás usuarios (Ridings, Gefen, & Arinze, 2002), que tienen como objetivo ofrecer valoraciones y críticas independientes sobre servicios turísticos por parte de personas que los hayan experimentado para que así, sirvan de ayuda a otros usuarios para sus futuras decisiones de consumo. El portal TripAdvisor es un prominente ejemplo de una plataforma eWOM dentro del sector de viajes y, dada la importancia que ha adquirido para la reputación de cualquier establecimiento hotelero, se han realizado numerosas investigaciones (Ayeh, Au, & Law, 2013;Bold, 2012;Chevalier & Mayzlin, 2006;Law, 2006;Mayzlin, Dover, & Chevalier, 2012;O'Connor, 2008O'Connor, , 2010Vermeulen & Seegers, 2009;Vásquez, 2011;Wilson, 2012). TripAdvisor actúa como un foro en el que viajeros publican sus valoraciones personales sobre hoteles recomendando o no el establecimiento a otros viajeros.…”

Motivation for Individuals’ Involvement With Fan Pages

“…The valence of comments showed that a positive experience of the product or brand can generate empathy and positive feelings among the members (Bickart et al, 2001) which are then exchanged via fan pages. Information and experience exchanges among consumers have a positive effect on the perceived value of a product, and the likelihood of the product being recommend by them (Gruen et al, 2006) and also purchased (Chintagunta et al, 2010;Mayzlin et al, 2006). Positive comments from a brand's fans can also increase the value of the brand and create empathy among the brand's fans.…”