Taste of Free Lunch: The Impact of Free Product Disclosure on Review Dynamics

16 Pages Posted: 30 Apr 2024

See all articles by Yimin Yin

Yimin Yin

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management

Yipu Deng

HKU Business School, The University of Hong Kong

Xiao Lei

HKU Business School, The University of Hong Kong

Date Written: April 29, 2024

Abstract

This study investigates the impact of free product disclosure on review platforms, where reviewers voluntarily reveal if they received the product for free. Specifically, we examine whether and how this disclosure policy influences subsequent review generation. Using a quasi-experimental design on Steam, the world's largest gaming platform, we empirically find that free label reviews increase both volume and efficiency of subsequent reviews. Notably, the increase in volume is more pronounced when free label reviews are of poorer quality, indicating a disconfirmation effect. Additionally, active reviewers, who tend to write effective reviews, contribute significantly to review efficiency under this effect. Our findings suggest that user-generated content (UGC) platforms could leverage free product disclosure as a cost-effective strategy to improve subsequent UGC. This study also complements prior research by showing that the UGC community can organically address the positive bias induced by free label reviews through subsequent reviews.

Keywords: free product disclosure, information efficiency, disconfirmation effect, user-generated content

Suggested Citation

Yin, Yimin and Deng, Yipu and Lei, Xiao, Taste of Free Lunch: The Impact of Free Product Disclosure on Review Dynamics (April 29, 2024). Available at SSRN: https://ssrn.com/abstract=4810618 or http://dx.doi.org/10.2139/ssrn.4810618

Yimin Yin (Contact Author)

Shanghai Jiao Tong University (SJTU) - Antai College of Economics and Management ( email )

No.535 Fahuazhen Road
Shanghai Jiao Tong University
Shanghai, Shanghai 200052
China

Yipu Deng

HKU Business School, The University of Hong Kong ( email )

Hong Kong
China

Xiao Lei

HKU Business School, The University of Hong Kong ( email )

Hong Kong
China

HOME PAGE: http://www.xiao-lei.org

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
52
Abstract Views
225
Rank
715,337
PlumX Metrics