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The Effect of Word of Mouth on Sales: Online Book Reviews

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  • Judith A. Chevalier
  • Dina Mayzlin

Abstract

We examine the effect of consumer reviews on relative sales of books on Amazon.com and BarnesandNoble.com. We find that 1) reviews are overwhelmingly positive at both sites, but there are more reviews and longer reviews at Amazon.com, 2) an improvement in a book's reviews leads to an increase in relative sales at that site, and 3) the impact of 1-star reviews is greater than the impact of 5-star reviews. The results suggest that new forms of customer communication on the Internet have an important impact on customer behavior.

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Bibliographic Info

Paper provided by National Bureau of Economic Research, Inc in its series NBER Working Papers with number 10148.

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Date of creation: Dec 2003
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Publication status: published as Chevalier, Judith and Dina Mayzlin. “The Effect of Word of Mouth on Sales: Online Book Reviews." Journal of Marketing Research (August 2006).
Handle: RePEc:nbr:nberwo:10148

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  1. Ellison, Glenn & Fudenberg, Drew, 1995. "Word-of-Mouth Communication and Social Learning," The Quarterly Journal of Economics, MIT Press, vol. 110(1), pages 93-125, February.
  2. Karen Clay & Ramayya Krishnan & Eric Wolff, 2001. "Prices and Price Dispersion on the Web: Evidence from the Online Book Industry," NBER Working Papers 8271, National Bureau of Economic Research, Inc.
  3. Foster, Andrew D & Rosenzweig, Mark R, 1995. "Learning by Doing and Learning from Others: Human Capital and Technical Change in Agriculture," Journal of Political Economy, University of Chicago Press, vol. 103(6), pages 1176-1209, December.
  4. Austan Goolsbee & Judith Chevalier, 2002. "Measuring Prices and Price Competition Online: Amazon and Barnes and Noble," Yale School of Management Working Papers ysm290, Yale School of Management, revised 12 Sep 2008.
  5. Michael Smith & Erik Brynjolfsson, 1999. "Frictionless Commerce? A Comparison of Internet and Conventional Retailers," Computing in Economics and Finance 1999 1022, Society for Computational Economics.
  6. Paul Resnick & Christopher Avery & Richard Zeckhauser, 1999. "The Market for Evaluations," American Economic Review, American Economic Association, vol. 89(3), pages 564-584, June.
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Cited by:
  1. David Godes & Dina Mayzlin & Yubo Chen & Sanjiv Das & Chrysanthos Dellarocas & Bruce Pfeiffer & Barak Libai & Subrata Sen & Mengze Shi & Peeter Verlegh, 2005. "The Firm's Management of Social Interactions," Marketing Letters, Springer, vol. 16(3), pages 415-428, December.
  2. Tucker, Catherine & Zhang, Juanjuan, 2007. "Long Tail or Steep Tail? A Field Investigation into How Online Popularity Information Affects the Distribution of Customer Choices," Working papers 39811, Massachusetts Institute of Technology (MIT), Sloan School of Management.
  3. Gaudeul, Alexia, 2008. "Software Marketing on the Internet: the Use of Samples and Repositories," MPRA Paper 19646, University Library of Munich, Germany.
  4. William N. Goetzmann & Vicente Pons-Sanz & S. Abraham Ravid, 2004. "Soft Information, Hard Sell: The Role of Soft Information in the Pricing of Intellectual Property," NBER Working Papers 10468, National Bureau of Economic Research, Inc.
  5. Caroline Elliott & Rob Simmons, 2008. "Determinants of UK Box Office Success: The Impact of Quality Signals," Review of Industrial Organization, Springer, vol. 33(2), pages 93-111, September.
  6. Enrico Moretti, 2008. "Social Learning and Peer Effects in Consumption: Evidence from Movie Sales," NBER Working Papers 13832, National Bureau of Economic Research, Inc.
  7. Beck, Jonathan, 2009. "Diderot's rule," MPRA Paper 17404, University Library of Munich, Germany.
  8. Goknil N. Kocak & N. Serdar Sever, 2011. "Should I Take It or Should I Not? Exploration of Students’ Course Choice as a Product," International Review of Management and Marketing, Econjournals, vol. 1(1), pages 1-7, April.
  9. Jonathan Beck, 2007. "The sales effect of word of mouth: a model for creative goods and estimates for novels," Journal of Cultural Economics, Springer, vol. 31(1), pages 5-23, March.
  10. Sharma, Dheeraj & Verma, Varsha, . "Consumers' Need for Uniqueness: A Cross-Cultural Validation," IIMA Working Papers WP2014-03-20, Indian Institute of Management Ahmedabad, Research and Publication Department.
  11. John Ashworth & Bruno Heyndels & Kristien Werck, 2010. "Expert judgements and the demand for novels in Flanders," Journal of Cultural Economics, Springer, vol. 34(3), pages 197-218, August.
  12. Mark Bowden & Stuart McDonald, 2008. "The Impact of Interaction and Social Learning on Aggregate Expectations," Computational Economics, Society for Computational Economics, vol. 31(3), pages 289-306, April.
  13. Neeraj Arora & Xavier Dreze & Anindya Ghose & James Hess & Raghuram Iyengar & Bing Jing & Yogesh Joshi & V. Kumar & Nicholas Lurie & Scott Neslin & S. Sajeesh & Meng Su & Niladri Syam & Jacquelyn Thom, 2008. "Putting one-to-one marketing to work: Personalization, customization, and choice," Marketing Letters, Springer, vol. 19(3), pages 305-321, December.

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