Do Incentives to Review Help the Market? Evidence from a Field Experiment on Airbnb
Marketing Science · 2023 · Volume 42 · Issue 5
Abstract
Many online reputation systems operate by asking volunteers to write reviews for free. As a result, a large share of buyers do not review, and those who do review are self-selected. This can cause the reputation system to miss important information about seller quality. We study the extent to which a platform can improve market outcomes by attempting to increase the amount and quality of information collected by its reputation system. We do so by analyzing a randomized experiment conducted by Airbnb. In the treatment, buyers were offered a coupon to review listings that had no prior reviews. In the control, buyers were not offered any incentive to review. We find that, although the treatment induced additional reviews that were more negative on average, these reviews did not affect the number of nights sold or total revenue. Furthermore, we find that, contrary to the treatment’s intended effect, Airbnb’s incentivized program caused transaction quality for treated sellers to fall. We examine how the quality of the induced reviews, market conditions, and the design of Airbnb’s reputation system can explain our findings. History: Catherine Tucker served as the senior editor. Supplemental Material: The online appendix and data are available at https://doi.org/10.1287/mksc.2023.1439 .
Keywords
field experiments, word-of-mouth, digital platforms, reputation, market design
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