Do online reviews affect product sales? The role of reviewer characteristics and temporal effects

By Nan Hu, Lingbing Liu, Jie Jennifer Zhang. Inf. Technol. Manag., 2008

727 citations recorded by the source corpus.

Online product reviews provided by consumers who previously purchased products have become a major information source for consumers and marketers regarding product quality. This study extends previous research by conducting a more compelling test of the effect of online reviews on sales. In particular, we consider both quantitative and qualitative aspects of online reviews, such as reviewer quality, reviewer exposure, product coverage, and temporal effects. Using transaction cost economics and uncertainty reduction theories, this study adopts a portfolio approach to assess the effectiveness of the online review market. We show that consumers understand the value difference between favorable news and unfavorable news and respond accordingly. Furthermore, when consumers read online reviews, they pay attention not only to review scores but to other contextual information such as a reviewer’s reputation and reviewer exposure. The market responds more favorably to reviews written by reviewers with better reputation and higher exposure. Finally, we demonstrate that the impact of online reviews on sales diminishes over time. This suggests that firms need not provide incentives for customers to write reviews beyond a certain time period after products have been released.

Subfields: Artificial Intelligence, Marketing, Sociology and Political Science

View Paper: https://www.semanticscholar.org/paper/bbedb7205fca30cb96e3984f88b0db125add0790

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Citations in the corpus

Asymmetric effects of online consumer reviews (2015, methodology): “Specifically, the researchers collected the individual reviews of each business after randomizing the order of the business listings in each region (Hu et al., 2008; Racherla & Friske, 2012; Zhang et al., 2010).”
The impact of electronic word-of-mouth communication: A literature analysis and integrative model (2012, background): “Source credibility includes two major dimensions: expertise and trustworthiness [44,75].”
In Search of Negativity Bias: An Empirical Study of Perceived Helpfulness of Online Reviews (2013, background): “Also, recent studies of online reviews have found that online review readers use source cues (such as reviewers’ identity disclosures, and community-rated reputation) to help filter and process review content (Forman et al., 2008; Hu et al., 2008; Vermeulen & Seegers, 2009).”
Helpfulness of Online Consumer Reviews: Readers' Objectives and Review Cues (2012, result): “83, which is in accordance with those obtained in previous studies [12, 23].”
The Effect of Electronic Word of Mouth Communications on Intention to Buy: A Meta-Analysis (2019, positive): “Source trustworthiness is considered an important predictor of the persuasiveness of eWOM communications (Cheung et al. 2009; Hu et al. 2008).”
The effect of characteristics of source credibility on consumer behaviour: A meta-analysis (2020, background): “10 Source trustworthiness is an important predictor of the persuasiveness of online reviews (Cheung et al., 2009; Hu et al., 2008).”
Helpfulness of Online Product Reviews as Seen by Consumers: Source and Content Features (2013, background): “Interaction Effect The authorship and the content abstractness of product reviews have an interaction effect on product review helpfulness [36].”
First Step in Social Media: Measuring the Influence of Online Management Responses on Customer Satisfaction (2014, background): “Although positive customer comments can increase sales, negative comments are often more inﬂuential than positive ones (Chevalier and Mayzlin 2006), and customers with strong negative views are more motivated to post in online social media than customers with average views (Hu et al. 2008).”
Estimating the prevalence of deception in online review communities (2012, background): “In terms of economic theory, the role of review communities is to reduce the inherent information asymmetry [18] between buyers and sellers in online marketplaces, by providing buyers with a priori knowledge of the underlying quality of the products being sold [7].”