When Do Consumers Value Positive vs. Negative Reviews? An Empirical Investigation of Confirmation Bias in Online Word of Mouth

Information Systems Research, Vol. 27, No. 1, pp. 131-144, 2016

15 Pages Posted: 6 Nov 2015 Last revised: 23 Mar 2016

See all articles by Dezhi Yin

Dezhi Yin

University of Missouri

Sabyasachi Mitra

Georgia Institute of Technology; Georgia Institute of Technology - Scheller College of Business

Han Zhang

Georgia Institute of Technology - Scheller College of Business

Date Written: October 21, 2015

Abstract

In the online word-of-mouth literature, research has consistently shown that negative reviews have a greater impact on product sales than positive reviews. While this negativity effect is well documented at the product level, there is less consensus on whether negative or positive reviews are perceived to be more helpful by consumers. A limited number of studies document a higher perceived helpfulness for negative reviews under certain conditions, but accumulating empirical evidence suggest the opposite. To reconcile these contradictory findings, we propose that consumers can form initial beliefs about a product on the basis of the product’s summary rating statistics (such as the average and dispersion of the product’s ratings), and that these initial beliefs play a vital role in their subsequent evaluation of individual reviews. Using a unique panel data set collected from Apple’s App Store, we empirically demonstrate confirmation bias – that consumers have a tendency to perceive reviews that confirm (vs. dis-confirm) their initial beliefs as more helpful, and that this tendency is moderated by their confidence in their initial beliefs. Further, we show that confirmation bias can lead to greater perceived helpfulness for positive reviews (positivity effect) when the average product rating is high, and for negative reviews (negativity effect) when the average product rating is low. Thus, the mixed findings in the literature can be a consequence of confirmation bias. This paper is among the first to incorporate the important role of consumers’ initial beliefs and confidence in such beliefs (a fundamental dimension of metacognition) into their evaluation of online reviews, and our findings have significant implications for researchers, retailers and review websites.

Keywords: positive-negative asymmetry, negativity effect, positivity effect, confirmation bias, online word-of-mouth, product review, review rating, review helpfulness

JEL Classification: D84

Suggested Citation

Yin, Dezhi and Mitra, Sabyasachi and Zhang, Han, When Do Consumers Value Positive vs. Negative Reviews? An Empirical Investigation of Confirmation Bias in Online Word of Mouth (October 21, 2015). Information Systems Research, Vol. 27, No. 1, pp. 131-144, 2016. Available at SSRN: https://ssrn.com/abstract=2686218

Dezhi Yin (Contact Author)

University of Missouri ( email )

440 Cornell Hall
University of Missouri
Columbia, MO 65211
United States

HOME PAGE: http://www.dennyyin.com

Sabyasachi Mitra

Georgia Institute of Technology ( email )

Atlanta, GA 30332
United States

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Han Zhang

Georgia Institute of Technology - Scheller College of Business ( email )

800 West Peachtree St.
Atlanta, GA 30308
United States

Register to save articles to
your library

Register

Paper statistics

Downloads
554
Abstract Views
2,071
rank
49,417
PlumX Metrics