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Consumers, experts, and online product evaluations: Evidence from the brewing industry

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  • Jacobsen, Grant D.

Abstract

The growth of the Internet has led to a dramatic increase in the number of consumer or “user” product ratings, which are posted online by individuals who have consumed a good, and are available to other individuals as they make decisions about which products to purchase. These ratings have the potential to substantially improve the match between products and consumers, however the extent to which they do so likely depends on whether the ratings reflect actual consumer experiences. This paper evaluates one potential source of bias in consumer ratings: mimicry of the reviews of experts. Using a rich dataset on consumer product ratings from the brewing industry and a regression discontinuity empirical framework, I show that expert reviews influence consumer ratings. Consumer ratings fall in response to negative expert reviews and increase in response to positive expert reviews. The results are most pronounced for strongly negative or strongly positive expert reviews. This mimicry limits the extent to which information on product quality from actual consumer experiences diffuses to the population. I suggest that “nudges” could be implemented to limit the extent to which mimicry affects ratings.

Suggested Citation

  • Jacobsen, Grant D., 2015. "Consumers, experts, and online product evaluations: Evidence from the brewing industry," Journal of Public Economics, Elsevier, vol. 126(C), pages 114-123.
  • Handle: RePEc:eee:pubeco:v:126:y:2015:i:c:p:114-123
    DOI: 10.1016/j.jpubeco.2015.04.005
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    Cited by:

    1. Tommaso Bondi, 2019. "Alone, Together. Product Discovery Through Consumer Ratings," Working Papers 19-09, NET Institute.
    2. Irani-Kermani, Roozbeh & Jaenicke, Edward C., 2018. "Generalizing Variety Seeking Measurement from Brand Space to Product Attribute Space," 2018 Annual Meeting, August 5-7, Washington, D.C. 273818, Agricultural and Applied Economics Association.
    3. Sergio M. Fernández-Miguélez & Miguel Díaz-Puche & Juan A. Campos-Soria & Federico Galán-Valdivieso, 2020. "The Impact of Social Media on Restaurant Corporations’ Financial Performance," Sustainability, MDPI, vol. 12(4), pages 1-14, February.
    4. Sofia B. Villas‐Boas & Céline Bonnet & James Hilger, 2021. "Random Utility Models, Wine and Experts," American Journal of Agricultural Economics, John Wiley & Sons, vol. 103(2), pages 663-681, March.

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    More about this item

    Keywords

    Consumer ratings; User ratings; Product ratings; Electronic-word-of-mouth; eWOM; user-generated content; Expert reviews; Beer; Brewing industry; Nudges;
    All these keywords.

    JEL classification:

    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations

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