The Costs of Ambiguous Information Disclosure: On the Unintended Consequences of Providing Restaurant Hygiene Scores on Platforms in the United States

Information disclosure on digital platforms is ubiquitous and often well intentioned, yet it frequently results in unintended consequences. Given the prevalence of simplified cues prone to ambiguity in digital platforms’ information design, how such designs can induce ambiguity and consumer misunderstanding has not been closely evaluated. Yelp’s initiative to display hygiene inspection scores to restaurant webpages on Yelp across the United States, in response to consumers’ limited access to information about restaurant hygiene inspections online, provides a suitable context for us to examine the mechanisms by which simplified information disclosure can evoke misperceptions and result in unintended consequences. Using differences-in-differences (DID) analyses and online experiments, we study how the addition of hygiene scores on Yelp affects restaurant demand. Using a custom-built data set combining data from Yelp and SafeGraph foot traffic, we find that showing high (clean) hygiene scores on Yelp paradoxically reduces restaurant demand relative to restaurants for which Yelp does not show hygiene scores on their Yelp pages. To understand this effect, we propose a mechanism given how the hygiene information is displayed on Yelp—information ambiguity. We argue that consumers conflate online hygiene scores with the healthiness and tastiness of the food, thus intuitively leading to reduced demand. Results of two randomized experiments reveal that ambiguity appears to be the primary cause of misperceptions about hygiene scores. We also show that providing simple clarifications about the correct meaning of hygiene scores, as well as tweaking the displayed hygiene information to resolve ambiguity, helps mitigate consumer misperceptions. Finally, we show further support for this perspective through a differences-in-differences analysis confirming that partially remedying ambiguity can correct the negative effect on restaurant demand. Across two experiments and two regression models, our research informs theory on how valuable information can be presented online effectively in such a way as to reduce ambiguity, especially on social media platforms. We provide managerial implications for platforms such as Yelp and city municipal authorities that would like to disclose key information online, as well as for restaurant owners who may be affected by information disclosure on their restaurants provided on similar platforms.

History: Ravi Bapna, Senior Editor; Chad Ho, Associate Editor.

Funding: Supported by the Behavioral Research Assistance Grant, generously provided by the C. T. Bauer College of Business, University of Houston.

Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2023.0137.