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On the Spillover Effects of Online Product Reviews on Purchases: Evidence from Clickstream Data

60 Pages Posted: 14 Sep 2016 Last revised: 16 Dec 2016

Young Kwark

Warrington College of Business Administration, University of Florida

Gene Moo Lee

University of British Columbia (UBC) - Sauder School of Business

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Liangfei Qiu

University of Florida - Warrington College of Business Administration

Date Written: October 25, 2016

Abstract

We analyze the spillover effect of the online reviews of related products on the purchases of a focal product using clickstream data from a large retailer by investigating (a) whether the related, co-visited products are complementary or substitutive; (b) whether the related products are from the same or a different brand, and (c) the choice of media channel (mobile or PC) used. To identify complementary and substitutive products, we used a text-mining approach of topic modeling on the product descriptions to quantify the functional similarity of pairwise products. Our empirical analysis shows that the mean rating of the online reviews of substitutive products has a negative effect on the purchasing of the focal product, while the mean rating of complementary products has a positive effect. Moreover, we find that the negative spillover effect of the online reviews of substitutive products across different brands on the purchasing of a focal product is significantly higher than those of the same brand, and for consumers who viewed online product reviews on mobile devices versus traditional PCs. Our study has theoretical and managerial implications on leveraging the spillover effects of the online product reviews of related products on purchases.

Keywords: Online Product Reviews, Substitutive Products, Complementary Products, Brand Spillover, WOM Spillover, Topic Modeling

Suggested Citation

Kwark, Young and Lee, Gene Moo and Pavlou, Paul A. and Qiu, Liangfei, On the Spillover Effects of Online Product Reviews on Purchases: Evidence from Clickstream Data (October 25, 2016). Available at SSRN: https://ssrn.com/abstract=2838410 or http://dx.doi.org/10.2139/ssrn.2838410

Young Kwark

Warrington College of Business Administration, University of Florida ( email )

PO Box 117165, 201 Stuzin Hall
Gainesville, FL 32610-0496
United States

Gene Moo Lee (Contact Author)

University of British Columbia (UBC) - Sauder School of Business ( email )

2053 Main Mall
Vancouver, BC V6T 1Z2
Canada

Paul A. Pavlou

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

Liangfei Qiu

University of Florida - Warrington College of Business Administration ( email )

Gainesville, FL 32611
United States

HOME PAGE: http://sites.google.com/site/qiuliangfei/

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