Alone, Together: A Model of Social (Mis)Learning from Consumer Reviews

References

• Acemoglu D, Makhdoumi A, Malekian A, Ozdaglar A (2022) Learning from reviews: The selection effect and the speed of learning. Econometrica 90(6):2857–2899.Crossref, Google Scholar
• Banerjee AV (1992) A simple model of herd behavior. Quart. J. Econom. 107(3):797–817.Crossref, Google Scholar
• Bar-Isaac H, Caruana G, Cuñat V (2012) Search, design, and market structure. Amer. Econom. Rev. 102(2):1140–1160.Crossref, Google Scholar
• Besbes O, Scarsini M (2018) On information distortions in online ratings. Oper. Res. 66(3):597–610.Link, Google Scholar
• Bikhchandani S, Hirshleifer D, Welch I (1992) A theory of fads, fashion, custom, and cultural change as informational cascades. J. Political Econom. 100(5):992–1026.Crossref, Google Scholar
• Bondi T, Rossi M, Stevens R (2024) The good, the bad and the picky: Consumer heterogeneity and the reversal of product ratings. Management Sci., ePub ahead of print December 4, https://doi.org/10.1287/mnsc.2022.03281.Link, Google Scholar
• Byers JW, Mitzenmacher M, Zervas G (2012) The Groupon effect on Yelp ratings: A root cause analysis. Proc. 13th ACM Conf. Electronic Commerce (ACM), 248–265.Google Scholar
• Caminal R, Vives X (1996) Why market shares matter: An information-based theory. RAND J. Econom. 27(2):221–239.Crossref, Google Scholar
• Chakraborty I, Deb J, Oery A (2022) When do consumers talk? Preprint, submitted July 19, https://dx.doi.org/10.2139/ssrn.4155523.Google Scholar
• Che Y-K, Hörner J (2017) Recommender systems as mechanisms for social learning. Quart. J. Econom. 133(2):871–925.Crossref, Google Scholar
• Chen L, Papanastasiou Y (2021) Seeding the herd: Pricing and welfare effects of social learning manipulation. Management Sci. 67(11):6734–6750.Link, Google Scholar
• Chevalier JA, Mayzlin D (2006) The effect of word of mouth on sales: Online book reviews. J. Marketing Res. 43(3):345–354.Crossref, Google Scholar
• Clemons EK, Gao GG, Hitt LM (2006) When online reviews meet hyperdifferentiation: A study of the craft beer industry. J. Management Inform. Systems 23(2):149–171.Crossref, Google Scholar
• De Langhe B, Fernbach PM, Lichtenstein DR (2015) Navigating by the stars: Investigating the actual and perceived validity of online user ratings. J. Consumer Res. 42(6):817–833.Crossref, Google Scholar
• DeGroot MH (1974) Reaching a consensus. J. Amer. Statist. Assoc. 69(345):118–121.Crossref, Google Scholar
• Ellison G, Fudenberg D (1995) Word-of-mouth communication and social learning. Quart. J. Econom. 110(1):93–125.Crossref, Google Scholar
• Fainmesser IP, Lauga DO, Ofek E (2021) Ratings, reviews, and the marketing of new products. Management Sci. 67(11):7023–7045.Link, Google Scholar
• Filippas A, Horton J, Golden J (2022) Reputation inflation: Evidence from an online labor. Marketing Sci. 41(4):733–745.Link, Google Scholar
• Godes D, Silva JC (2012) Sequential and temporal dynamics of online opinion. Marketing Sci. 31(3):448–473.Link, Google Scholar
• Golub B, Jackson MO (2010) Naive learning in social networks and the wisdom of crowds. Amer. Econom. J. Microeconomics 2(1):112–149.Crossref, Google Scholar
• He S, Hollenbeck B, Proserpio D (2022) The market for fake reviews. Marketing Sci. 41(5):896–921.Link, Google Scholar
• Jacobsen GD (2015) Consumers, experts, and online product evaluations: Evidence from the brewing industry. J. Public Econom. 126:114–123.Crossref, Google Scholar
• Johnson JP, Myatt DP (2006) On the simple economics of advertising, marketing, and product design. Amer. Econom. Rev. 96(3):756–784.Crossref, Google Scholar
• Koh A, Li R (2023) Competition and social learning. Preprint, submitted May 11, https://dx.doi.org/10.2139/ssrn.4433686.Google Scholar
• Kotler P, Levy SJ (1971) Demarketing, yes, demarketing. Harvard Bus. Rev. 79:74–80.Google Scholar
• Kovács B, Sharkey AJ (2014) The paradox of publicity: How awards can negatively affect the evaluation of quality. Admin. Sci. Quart. 59(1):1–33.Crossref, Google Scholar
• Kremer I, Mansour Y, Perry M (2014) Implementing the wisdom of the crowd. J. Political Econom. 122(5):988–1012.Crossref, Google Scholar
• Le Mens G, Kovács B, Avrahami J, Kareev Y (2018) How endogenous crowd formation undermines the wisdom of the crowd in online ratings. Psych. Sci. 29(9):1475–1490.Crossref, Google Scholar
• Lee N, Bollinger B, Staelin R (2023) Vertical versus horizontal variance in online reviews and their impact on demand. J. Marketing Res. 60(1):130–154.Crossref, Google Scholar
• Li X, Hitt LM (2008) Self-selection and information role of online product reviews. Inform. Systems Res. 19(4):456–474.Link, Google Scholar
• Lin S, Zhang J, Hauser JR (2015) Learning from experience, simply. Marketing Sci. 34(1):1–19.Link, Google Scholar
• Liu Y, Lambrecht A, Deng Y (2019) Price promotions and online product evaluations. Preprint, submitted January, https://dx.doi.org/10.2139/ssrn.3506009.Google Scholar
• Luca M (2011) Reviews, reputation, and revenue: The case of yelp.com. Preprint, submitted September 16, http://dx.doi.org/10.2139/ssrn.1928601.Google Scholar
• Luca M, Reshef O (2021) What are consumers rating? Evidence from Yelp!. Management Sci.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.Link, Google Scholar
• Mayzlin D, Dover Y, Chevalier J (2014) Promotional reviews: An empirical investigation of online review manipulation. Amer. Econom. Rev. 104(8):2421–2455.Crossref, Google Scholar
• Muchnik L, Aral S, Taylor SJ (2013) Social influence bias: A randomized experiment. Science 341(6146):647–651.Crossref, Google Scholar
• Papanastasiou Y, Savva N (2016) Dynamic pricing in the presence of social learning and strategic consumers. Management Sci. 63(4):919–939.Link, Google Scholar
• Papanastasiou Y, Bimpikis K, Savva N (2017) Crowdsourcing exploration. Management Sci. 64(4):1727–1746.Link, Google Scholar
• Park S, Shin W, Xie J (2021) The fateful first consumer review. Marketing Sci. 40(3):481–507.Link, Google Scholar
• Payne JW, Bettman JR, Johnson EJ (1993) The Adaptive Decision Maker (Cambridge University Press, Cambridge, UK).Crossref, Google Scholar
• Powell D, Yu J, DeWolf M, Holyoak KJ (2017) The love of large numbers: A popularity bias in consumer choice. Psych. Sci. 28(10):1432–1442.Crossref, Google Scholar
• Reimers I, Waldfogel J (2021) Digitization and pre-purchase information: The causal and welfare impacts of reviews and crowd ratings. Amer. Econom. Rev. 111(6):1944–1971.Crossref, Google Scholar
• Rossi M (2021) Quality disclosures and disappointment: Evidence from the Academy Awards. Proc. 22nd ACM Conf. Econom. Comput., 790–791.Google Scholar
• Sun M (2012) How does the variance of product ratings matter? Management Sci. 58(4):696–707.Link, Google Scholar
• Tucker C, Zhang J (2011) How does popularity information affect choices? A field experiment. Management Sci. 57(5):828–842.Link, Google Scholar
• Tucker C, Zhang J, Zhu T (2013) Days on market and home sales. RAND J. Econom. 44(2):337–360.Crossref, Google Scholar
• Vellodi N (2018) Ratings design and barriers to entry. Preprint, submitted November 13, https://dx.doi.org/10.2139/ssrn.3267061.Google Scholar
• Watson J, Ghosh AP, Trusov M (2018) Swayed by the numbers: The consequences of displaying product review attributes. J. Marketing 82(6):109–131.Crossref, Google Scholar
• Zhang J (2010) The sound of silence: Observational learning in the US kidney market. Marketing Sci. 29(2):315–335.Link, Google Scholar