Quaderni - Working Paper DSE N° 1060
37 Pages Posted: 27 Feb 2016
Date Written: February 18, 2016
The aim of this paper is to study the empirical phenomenon of rating bubbles, i.e. clustering on extremely positive values in e-commerce platforms and rating web sites. By means of a field experiment that exogenously manipulates prior ratings for a hotel in an important Italian tourism destination, we investigate whether consumers are influenced by prior ratings when evaluating their stay (i.e., social influence bias). Results show that positive social influence exists, and that herd behavior is asymmetric: information on prior positive ratings has a stronger influence on consumers’ rating attitude than information on prior mediocre ratings. Furthermore, we are able to exclude any brag-or-moan effect: the behavior of frequent reviewers, on average, is not statistically different from the behavior of consumers who have never posted ratings online. Yet, non-reviewers exhibit a higher influence to excellent prior ratings, thus lending support to the social influence bias interpretation. Finally, also repeat customers are affected by prior ratings, although to a lesser extent with respect to new customers.
Keywords: Online Ratings, User-Generated Contents, Field Experiment, Rating Bubbles, Social Influence Bias, Herd Behavior
JEL Classification: C93, D83, L86, Z31
Suggested Citation: Suggested Citation
Cicognani, Simona and Figini, Paolo and Magnani, Marco, Social Influence Bias in Online Ratings: A Field Experiment (February 18, 2016). Quaderni - Working Paper DSE N° 1060. Available at SSRN: https://ssrn.com/abstract=2737992 or http://dx.doi.org/10.2139/ssrn.2737992