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Promotional Reviews: An Empirical Investigation of Online Review Manipulation

41 Pages Posted: 14 Aug 2012 Last revised: 19 Aug 2012

Dina Mayzlin

USC Marshall School of Business

Yaniv Dover

Hebrew University of Jerusalem - Jerusalem School of Business Administration

Judith A. Chevalier

Yale School of Management; National Bureau of Economic Research (NBER)

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Date Written: August 13, 2012

Abstract

Online reviews could, in principle, greatly improve the match between consumers and products. However, the authenticity of online user reviews remains a concern; firms have an incentive to manufacture positive reviews for their own products and negative reviews for their rivals. In this paper, we marry the diverse literature on economic subterfuge with the literature on organizational form. We undertake an empirical analysis of promotional reviews, examining both the extent to which fakery occurs and the market conditions that encourage or discourage promotional reviewing activity. Specifically, we examine hotel reviews, exploiting the organizational differences between two travel websites: Expedia.com, and Tripadvisor.com. While anyone can post a review on Tripadvisor, a consumer could only post a review of a hotel on Expedia if the consumer actually booked at least one night at the hotel through the website. We examine differences in the distribution of reviews for a given hotel between Tripadvisor and Expedia. We show in a simple model that the net gains from promotional reviewing are likely to be highest for independent hotels that are owned by single-unit owners and lowest for branded chain hotels that are owned by multi-unit owners. Our methodology thus isolates hotels with a disproportionate incentive to engage in promotional reviewing activity. We show that hotels with a high incentive to fake have a greater share of five star (positive) reviews on Tripadvisor relative to Expedia. Furthermore, we show that the hotel neighbors of hotels with a high incentive to fake have more one and two star (negative) reviews on Tripadvisor relative to Expedia.

Keywords: user reviews, word of mouth, review manipulation, online communication

Suggested Citation

Mayzlin, Dina and Dover, Yaniv and Chevalier, Judith A., Promotional Reviews: An Empirical Investigation of Online Review Manipulation (August 13, 2012). Available at SSRN: https://ssrn.com/abstract=2128860 or http://dx.doi.org/10.2139/ssrn.2128860

Dina Mayzlin

USC Marshall School of Business ( email )

701 Exposition Blvd
Los Angeles, CA 90089
United States
213-740-3360 (Phone)

Yaniv Dover (Contact Author)

Hebrew University of Jerusalem - Jerusalem School of Business Administration ( email )

Mount Scopus
Jerusalem, 91905
Israel

Judith Chevalier

Yale School of Management ( email )

135 Prospect Street
P.O. Box 208200
New Haven, CT 06520-8200
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

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