Promotional Reviews: An Empirical Investigation of Online Review Manipulation

51 Pages Posted: 25 Aug 2012 Last revised: 27 Oct 2014

See all articles by Dina Mayzlin

Dina Mayzlin

University of Southern California - 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)

Multiple version iconThere are 2 versions of this paper

Date Written: August 2012

Abstract

Online reviews could, in principle, greatly improve consumers' ability to evaluate 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 can only post a review of a hotel on Expedia if she 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 exploit the characteristics of a hotel's neighbor. We show that hotels with a nearby neighbor have more one- and two-star (negative) reviews on TripAdvisor relative to Expedia. We argue 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 the hotel neighbors of hotels with a high incentive to fake have more one- and two-star (negative) reviews on TripAdvisor relative to Expedia than do hotels whose neighbors have a low incentive to fake. Furthermore, we show that hotels with a high incentive to fake have a greater share of five-star (positive) reviews on TripAdvisor relative to Expedia.

Suggested Citation

Mayzlin, Dina and Dover, Yaniv and Chevalier, Judith A., Promotional Reviews: An Empirical Investigation of Online Review Manipulation (August 2012). NBER Working Paper No. w18340. Available at SSRN: https://ssrn.com/abstract=2136009

Dina Mayzlin (Contact Author)

University of Southern California - Marshall School of Business ( email )

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

Yaniv Dover

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

Mount Scopus
Jerusalem, 91905
Israel

Judith A. 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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