Exploring the Impact of Incentivized Reviews on Product Sales and the Role of Review Inconsistency

37 Pages Posted: 12 Apr 2023 Last revised: 8 Jan 2024

See all articles by Jingyuan Deng

Jingyuan Deng

National University of Singapore

Warut Khern-am-nuai

McGill University - Desautels Faculty of Management

Dandan Qiao

National University of Singapore (NUS)

Date Written: January 3, 2024

Abstract

Incentives, like freebies and discounts, are a popular way for sellers to get reviews, especially important for new products with little (if any) feedback that potential customers often use to decide whether to purchase such products. While research has shown that incentives can affect reviewing behavior, there’s still little knowledge about how these incentivized reviews impact final product sales and how different levels of review consistency might influence consumer behavior. In this study, we fill this gap by leveraging the incentive context of the Amazon Vine program and collecting daily sales data for numerous products over an extended period. Using a difference-in-differences approach, we causally analyzed the impact of incentivized reviews on product sales. Although incentivized reviews could offer both benefits (e.g., delivering high-quality information) and drawbacks (e.g., creating a suspicion of advertising), our research shows that, on the whole, such reviews positively influence sales, resulting in notably increased sales volume. However, this positive effect can be weakened by both internal inconsistencies across incentivized reviews and external inconsistencies between incentivized reviews and organic (i.e., non-incentivized) reviews. Using a series of tests to examine the underlying mechanisms, we find that the influence of incentivized reviews on sales arises not only from the reviews themselves but also from their spill-over effects on organic reviews. We also conduct various specifications to demonstrate the consistency and robustness of our findings. We believe these insights can help improve the design of review incentive programs on commercial platforms.

Keywords: incentivized reviews, product sales, review inconsistency, disclosure

Suggested Citation

Deng, Jingyuan and Khern-am-nuai, Warut and Qiao, Dandan, Exploring the Impact of Incentivized Reviews on Product Sales and the Role of Review Inconsistency (January 3, 2024). Available at SSRN: https://ssrn.com/abstract=4403949

Jingyuan Deng (Contact Author)

National University of Singapore ( email )

Computing 1, 13 Computing Drive
Singapore, 117417
Singapore

Warut Khern-am-nuai

McGill University - Desautels Faculty of Management ( email )

1001 Sherbrooke St. West
Montreal, Quebec H3A1G5 H3A 2M1
Canada

Dandan Qiao

National University of Singapore (NUS) ( email )

13 computing drive
Singapore, 117591
Singapore

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