Channels of Impact: User Reviews When Quality is Dynamic and Managers Respond

39 Pages Posted: 5 Apr 2017

See all articles by Judith A. Chevalier

Judith A. Chevalier

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

Yaniv Dover

Hebrew University of Jerusalem - Jerusalem School of Business Administration

Dina Mayzlin

University of Southern California - Marshall School of Business

Multiple version iconThere are 2 versions of this paper

Date Written: March 2017

Abstract

We examine the effect of managerial response on consumer voice in a dynamic quality environment. We argue that, in this environment, the consumer is motivated to write reviews by, in addition to altruism, the possibility that the reviews will impact the quality of the service directly. We examine this empirically in a scenario in which reviewers receive a credible signal that the service provider is listening. Specifically, we examine the managerial response feature allowed by many review platforms. We hypothesize that managerial responses will stimulate reviewing activity and that, because managers respond more and in more detail to negative reviews, we hypothesize that managerial responses will particularly stimulate negative reviewing activity. Using a multiple-differences specification, we show that reviewing activity and particularly negative reviewing is indeed stimulated by managerial response. Our specification exploits comparison of the same hotel immediately before and after response initiation and compares a given hotels reviewing activity on sites with review response initiation to sites that do not allow managerial response.

Suggested Citation

Chevalier, Judith A. and Dover, Yaniv and Mayzlin, Dina, Channels of Impact: User Reviews When Quality is Dynamic and Managers Respond (March 2017). NBER Working Paper No. w23299. Available at SSRN: https://ssrn.com/abstract=2946705

Judith A. Chevalier (Contact Author)

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

Yaniv Dover

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

Mount Scopus
Jerusalem, 91905
Israel

Dina Mayzlin

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

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

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