Decomposing the Variance of Consumer Ratings and the Impact on Price and Demand

Published Online:https://doi.org/10.1287/isre.2017.0764

References

  • Amazon (2015) Customer reviews: Beats urBeats in-ear headphone. Accessed September 11, 2018, http://www.amazon.com/product-reviews/B00F5OOQ5Q/ref=psdc_2266981011_r0_B00F5OOQ5Q?_encoding=UTF8&showViewpoints=1.Google Scholar
  • Archak N, Ghose A, Ipeirotis PG (2011) Deriving the pricing power of product features by mining consumer reviews. Management Sci. 57(8):1485–1509.LinkGoogle Scholar
  • Babic Rosario A, Sotgiu F, De Valck K, Bijmolt TH (2016) The effect of electronic word of mouth on sales: A meta-analytic review of platform, product, and metric factors. J. Marketing Res. 53(3):297–318.CrossrefGoogle Scholar
  • Bai X, Marsden JR, Ross WT Jr, Wang G (2017) How e-WOM and local competition drive local retailers’ decisions about daily deal offerings. Decision Support Systems 101:82–94.CrossrefGoogle Scholar
  • Bardey D (2004) A paradoxical risk aversion effect on the consumers’ demand for quality. Recherches économiques de Louvain 70(1):109–115.CrossrefGoogle Scholar
  • Bass FM (1969) A new product growth for model consumer durables. Management Sci. 15(5):215–227.LinkGoogle Scholar
  • Bhatnagar A, Misra S, Rao HR (2000) On risk, convenience, and Internet shopping behavior. Comm. ACM 43(11):98–105.CrossrefGoogle Scholar
  • Chen P-YS, Wu S, Yoon J (2004) The impact of online recommendations and consumer feedback on sales. Proc. Internat. Conf. Inform. Systems, 711–724.Google Scholar
  • Chen Y, Xie J (2008) Online consumer review: Word-of-mouth as a new element of marketing communication mix. Management Sci. 54(3):477–491.LinkGoogle Scholar
  • Chevalier J, Mayzlin D (2006) The effect of word of mouth on sales: Online book reviews. J. Marketing Res. 43(3):345–354.CrossrefGoogle Scholar
  • Chintagunta PK, Gopinath S, Venkataraman S (2010) The effects of online user reviews on movie box office performance: Accounting for sequential rollout and aggregation across local markets. Marketing Sci. 29(5):944–957.LinkGoogle Scholar
  • Clemons E, Gao G, Hitt LM (2006) When online reviews meet hyperdifferentiation: A study of the craft beer industry. J. Management Inform. Systems 23(2):149–171.CrossrefGoogle Scholar
  • Dellarocas C (2003) The digitization of word of mouth: Promise and challenges of online feedback mechanisms. Management Sci. 49(10):1407–1424.LinkGoogle Scholar
  • Dellarocas C, Zhang XM, Awad NF (2007) Exploring the value of online product reviews in forecasting sales: The case of motion pictures. J. Interactive Marketing 21(4):23–45.CrossrefGoogle Scholar
  • Drewnicki N (2013) Survey: 90% say positive reviews impact purchase decisions. Accessed September 11, 2018, http://www.reviewpro.com/survey-zendesk-mashable-dimensional-research-90-say-positive-reviews-impact-purchase-decisions-26016#sthash.c9enKPvk.dpuf.Google Scholar
  • Duan W, Gu B, Whinston A (2008) Do online reviews matter? An empirical investigation of panel data. Decision Support Systems 45(4):1007–1016.CrossrefGoogle Scholar
  • Economist (2016) Will customer ratings for airlines prove as important as those of hotels? (July 12), https://www.economist.com/blogs/gulliver/2016/07/under-reviewed.Google Scholar
  • Engel JF, Kegerreis RJ, Blackwell RD (1969) Word-of-mouth communication by the innovator. J. Marketing 33(3):15–19.CrossrefGoogle Scholar
  • Godes D, Mayzlin D (2004) Using online conversations to study word of mouth communication. Marketing Sci. 23(4):545–560.LinkGoogle Scholar
  • Guo L, Villas-Boas JM (2007) Consumers stockpiling and price competition in differentiated markets. J. Econom. Management Strategy 16(4):827–858.CrossrefGoogle Scholar
  • Gutt D, Herrmann P (2015) Sharing means caring? Hosts’ price reaction to rating visibility. Proc. 23rd Eur. Conf. Inform. Systems.Google Scholar
  • Harmon A (2004) Amazon glitch unmasks war of reviewers. New York Times (February 14, 2004), http://www.nytimes.com/2004/02/14/us/amazon-glitch-unmasks-war-of-reviewers.html.Google Scholar
  • Herrmann P, Kundisch D, Zimmermann S, Nault BR (2015) How do different sources of the variance of consumer ratings matter? Proc. Internat. Conf. Inform. Systems.Google Scholar
  • Holt CA, Laury SK (2002) Risk aversion and incentive effects. Amer. Econom. Rev. 92(5):1644–1655.CrossrefGoogle Scholar
  • Hong Y, Chen P, Hitt LM (2012) Measuring product type with dynamics of online product review variance. Proc. Internat. Conf. Inform. Systems.Google Scholar
  • Hu N, Pavlou PA, Zhang J (2017) On self-selection biases in online product reviews. MIS Quart. 41(2):449–471.CrossrefGoogle Scholar
  • Ikkala T, Lampinen A (2014) Defining the price of hospitality: Networked hospitality exchange via Airbnb. Proc. 17th ACM Conf. Comput. Supported Cooperative Work Soc. Comput. (ACM, New York), 173–176.Google Scholar
  • Ikkala T, Lampinen A (2015) Monetizing network hospitality: Hospitality and sociability in the context of Airbnb. Proc. 18th ACM Conf. Comput. Supported Cooperative Work Soc. Comput. (ACM, New York), 1033–1044.Google Scholar
  • Klein L (1998) Evaluating the potential of interactive media through a new lens: Search versus experience goods. J. Bus. Res. 41(3):195–203.CrossrefGoogle Scholar
  • Kwark Y, Chen J, Raghunathan S (2014) Online product reviews: Implications for retailers and competing manufacturers. Inform. Systems Res. 25(1):93–110.LinkGoogle Scholar
  • Lewis G, Zervas G (2016) The welfare impact of consumer reviews: A case study of the hotel industry. Working paper, Microsoft Research and NBER.Google Scholar
  • Li X, Hitt LM (2008) Self-selection and information role of online product reviews. Inform. Systems Res. 19(4):456–474.LinkGoogle Scholar
  • Li X, Hitt LM (2010) Price effects in online product reviews: An analytical model and empirical analysis. MIS Quart. 34(4):809–831.CrossrefGoogle Scholar
  • Lu Q, Ye Q, Law R (2014) Moderating effects of product heterogeneity between online word-of-mouth and hotel sales. J. Electronic Commerce Res. 15(1):1–12.Google Scholar
  • Luca M, Zervas G (2016) Fake it till you make it: Reputation, competition, and Yelp review fraud. Management Sci. 62(12):3412–3427.LinkGoogle Scholar
  • Markopoulos PM, Clemons E (2013) Reducing buyers uncertainty about taste-related product attributes. J. Management Inform. Systems 30(2):269–299.CrossrefGoogle Scholar
  • Mayzlin D (2006) Promotional chat on the internet. Marketing Sci. 25(2):155–163.LinkGoogle Scholar
  • Nelson P (1981) Consumer information and advertising. Galatin M, Leiter RD, eds. Economics of Information (Springer, Dordrecht), 42–77.CrossrefGoogle Scholar
  • Rogers EM (1962) Diffusion of Innovation (Free Press, New York).Google Scholar
  • Shapiro C (1983) Optimal pricing of experience goods. Bell J. Econom. 14(2):497–507.CrossrefGoogle Scholar
  • Sridhar S, Srinivasan R (2012) Social influence effects in online product ratings. J. Marketing 76(5):70–88.CrossrefGoogle Scholar
  • Sun M (2012) How does the variance of product ratings matter? Management Sci. 58(4):696–707.LinkGoogle Scholar
  • Teubner T, Hawlitschek F, Dann D (2017) Price determinants on AirBnB: How reputation pays off in the sharing economy. J. Self-Governance Management Econom. 5(4):53–80.CrossrefGoogle Scholar
  • Wei D, Nault B (2013) Experience information goods: Version-to-upgrade. Decision Support Systems 56:494–501.CrossrefGoogle Scholar
  • Wu C, Che H, Chan TY, Lu X (2015) The economic value of online reviews. Marketing Sci. 34(5):739–754.LinkGoogle Scholar
  • Wu J, Wu Y, Sun J, Yang Z (2013) User reviews and uncertainty assessment: A two stage model of consumers’ willingness-to-pay in online markets. Decision Support Systems 55:175–185.CrossrefGoogle Scholar
  • Ye Q, Law R, Gu B (2009) The impact of online user reviews on hotel room sales. Internat. J. Hospitality Management 28(1):180–182.CrossrefGoogle Scholar
  • Ye Q, Law R, Gu B, Chen W (2011) The influence of user-generated content on traveler behavior: An empirical investigation on the effects of e-word-of-mouth to hotel online bookings. Comput. Human Behav. 27(2):634–639.CrossrefGoogle Scholar
INFORMS site uses cookies to store information on your computer. Some are essential to make our site work; Others help us improve the user experience. By using this site, you consent to the placement of these cookies. Please read our Privacy Statement to learn more.