Lecture 9 Consumer reviews

Question 1

benefits of having a lot of review platforms

Answer 1

• democratize the view
• gives voice to diverse set of people

Question 2

concerns because of a lot of review platforms

Answer 2

• we don’t know whether the reviews are in good faith or not
• bad intentions

Question 3

who uses reviews?

Answer 3

Half of adults under 50 routinely check online reviews. Mostly young people use reviews and it decreases with age, but still quite a bit of 65+ people use them.
low trustworthiness on accuracy. 50/50 split between American adults. The ones that often read reviews are more positive about them.

important if your platform uses reviews.

Question 4

who writes reviews

Answer 4

people that have a reason to write a review

Question 5

dilemma game; public goods game

Answer 5

everyone donates money, which then is divided equally. but there are always free riders
same with reviews; the more reviews are written the more useful they are.

Question 6

why do people write reviews

Answer 6

• help and inform others
• help/harm a business
• be influential
• get reward/status from the platform

Question 7

platforms perspective

Answer 7

• how do we get people to write more reviews
• how do we get the right type of people to write reviews

Question 8

Cui, Lui & Guo (2012)

Answer 8

tested how reviews impact sales for new products
took data from amazon of two different type of products; search or experience products.
examined weekly changes in user reviews and sales over 9 month with product sales as dependent variable.

Question 9

search products

Answer 9

products where individuals can search and learn about the products.
objectivity

Question 10

experience products

Answer 10

much more subjective, like a video game.

Question 11

general findings from Cui, Lui & Guo (2012)

Answer 11

• volume of reviews increased sales .37 in general
• % of positive reviews led to higher sales
• % of negative reviews led to lower sales (stronger effect than positive)

Question 12

Different type of product findings from Cui, Lui & Guo (2012)

Answer 12

• volume of reviews increased sales for both types, but way more for experience
• % of positive reviews increased sales for experience products, but not for search products
• % of negative reviews lowered sales for both types of products.

Question 13

loss aversion and reviews

Answer 13

people are more sensetive to negative information or experience. negative reviews have bigger impact.

businesses should be more concerned about negative reviews and how to combat them

Question 14

when do people share their opinion

Answer 14

when they’ve had a negative experience.
people are 2-3 times more likely to write a bad review after a negative experience than the other way.

Question 15

two perspectives to consider in consumer reviews

Answer 15

• author perspective: how do i write the most convincing review
• online platform: which reviews should i promote. also has an interest in customers seeing thrustworthy reviews

Question 16

3 trust cues

Answer 16

• emotion
• deviance
• humor

Question 17

idea behind emotion attribution in reviews

Answer 17

when we observe behavior, we come up with an explanation on why people behave this way.

Question 18

study by Junyong Kim & Pranjal Gupta

Answer 18

had participants rate reviews that were either emotional or unemotional
- rationality: negative emotion makes person seem less rational
- informative: negative emotion makes them seem less informative
- product negativity: product is seen as more negative when there is no emotion expressed in the reviews

Question 19

effect of emotion

Answer 19

• negative emotions undermine reviewer credibility
• this is the case for anger (unsure if it would be the same for other negative emotions)
• no effect on positive reviews

Question 20

idea behind deviance in reviews

Answer 20

deviant reviews are more effortful, which makes them seem more thoughtful and accurate

Question 21

study by Kupor and Tormala on deviance

Answer 21

manipulated the default and the deviant review participants had to rate.
- when default is moderate the extreme reviews are percieved as more thoughtful, accurate and with good intentions
- this effect flips depending in the default

Question 22

implications of findings on deviance

Answer 22

• reviews that stand out are seen as more accurate and informative
• what it means to stand out depends on context and the default

Question 23

idea behind humor in reviews

Answer 23

when using humor people can look relateable and be taken more seriously.
something is funny when it violates our expectation but is not actually harmful or threatening

Question 24

McGraw et al., (2015) motives/goals for complaining

Answer 24

• helping/warning
• entertain
• impression management
• redress (set things right
• sympathy

depending on goal it might be more or less likely and useful to use humor.

Question 25

when do people use humor

Answer 25

in their paper McGraw et al., argue that humor takes place with some violation of our expectation. negative reviews violate our expectations more.

Question 26

how are humorous complaints recieved

Answer 26

• got more likes on facebook
• were rated as funnier
• people were less likely to be seen as negative
• participants were more likely to accept a friend request.

but
- humurous complaints were seen as less of a priority/taken less serious

Question 27

goals in combination with humor

Answer 27

humor gives you a social advantage;
- helpful (warning), entertain, impression management are positively correlated
- negative correlation for redress and sympathy

Question 28

conclusion on humor

Answer 28

humor can be a useful tool, but it’s usefulness depends on the goal. it helps maintain positive image, but reduces the seriousness of complaint.

Question 29

two perspectives on trusting reviews

Answer 29

• wisdom of crowd
• costly signal theory

Question 30

wisdom of crowd

Answer 30

individually we can make mistakes but together they cancel out.

Question 31

costly signal theory

Answer 31

signal can only be honest if difficult to fake. trust reviews only if there is proof of buying and that the reviewer is not part of the company or a bot.

Question 32

amazon study on user rating and consumer reports

Answer 32

wanted to see if consumer ratings correlated with objective measure of product quality.
there were correlations everywhere ranging from -1 to 1, which is not good.
-> user reviews are somewhat a predictor of consumer reports’ reviews, but price is a better indicator for the quality.

Question 33

Luca & Zervas (2016)

Answer 33

looked ad yelp filters for reviews. 16% was filtered as suspicious
- fake positive reviews are more likely than fake negative reviews

also looked at author characteristics
- less reviews written
- less friends
- less likely to have a profile picture