Social Influence Bias in Online Ratings: A Field Experiment

Quaderni - Working Paper DSE N° 1060

37 Pages Posted: 27 Feb 2016  

Simona Cicognani

University of Verona - Department of Economics; University of Bologna - Rimini Centre for Economic Analysis

Paolo Figini

University of Bologna - Department of Economics; University of Bologna - CAST - Centre for Advanced Studies in Tourism

Marco Magnani

University of Bologna - School of Economics, Management, and Statistics

Date Written: February 18, 2016

Abstract

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

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

Simona Cicognani (Contact Author)

University of Verona - Department of Economics ( email )

Via dell'Artigliere, 8
37129 Verona
Italy

HOME PAGE: http://simonacicognani.weebly.com/

University of Bologna - Rimini Centre for Economic Analysis ( email )

Via Patara, 3
Rimini (RN), RN 47900
Italy

Paolo Figini

University of Bologna - Department of Economics ( email )

Piazza Scaravilli 2
Bologna, 40126
Italy

HOME PAGE: http://www2.dse.unibo.it/dsa/profile.php?id=33

University of Bologna - CAST - Centre for Advanced Studies in Tourism ( email )

Via Angherà 22
Rimini, RN 47922
Italy

Marco Magnani

University of Bologna - School of Economics, Management, and Statistics ( email )

Piazza Scaravilli 1
40126 Bologna, fc 47100
Italy

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