The Impact of Online User Reviews and Professional Reviews: A Bayesian Approach to Model Mediation and Moderation Effects

Abstract:     
With the broad reach of the Internet, consumers may get influenced simultaneously by two word-of-mouth (WOM) information sources — both online user reviews and professional reviews. This article examines how the impact of online user reviews on user choices is moderated by product variety and how the impact of professional reviews on user choices is mediated by volume of user reviews. Using software download data, the authors find that the impact of user reviews on software download varies over time and such variation is moderated by product variety. The increase in product variety strengthens the impact of positive user reviews, while weakening the impact of negative user reviews. They also find that professional reviews influence software download both directly and indirectly, partially mediated by volume of online user reviews. The increase in professional ratings not only directly promotes software downloads but also leads to more active user-generated WOM interactions, which in turn leads to more downloads as well. These findings offer some managerial suggestions for stimulating user-generated WOM activities, predicting user choices and online WOM marketing.

Number of Pages in PDF File: 53

Keywords: Online user reviews, professional reviews, word-of-mouth, moderation analysis, mediation analysis

JEL Classification: D12, C11, C23, L86, M31

working papers series