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Promotional Reviews: An Empirical Investigation of Online Review Manipulation

Dina Mayzlin, Yaniv Dover, Judith Chevalier

American Economic Review · 2014 · Volume 104 · Issue 8

DOI: 10.1257/aer.104.8.2421

Abstract

Firms' incentives to manufacture biased user reviews impede review usefulness. We examine the differences in reviews for a given hotel between two sites: Expedia.com (only a customer can post a review) and TripAdvisor.com (anyone can post). We argue that the net gains from promotional reviewing are highest for independent hotels with single-unit owners and lowest for branded chain hotels with multi-unit owners. We demonstrate that the hotel neighbors of hotels with a high incentive to fake have more negative reviews on TripAdvisor relative to Expedia; hotels with a high incentive to fake have more positive reviews on TripAdvisor relative to Expedia.

Keywords

Information and Product Quality, Standardization and Compatibility, Sports, Gambling, Restaurants, Recreation, Tourism, Marketing

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