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The Market for Fake Reviews

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  • He, Sherry
  • Hollenbeck, Brett
  • Proserpio, Davide

Abstract

We study the market for fake product reviews on Amazon.com. These reviews are purchased in large private internet groups on Facebook and other sites. We hand-collect data on these markets to characterize the types of products that buy fake reviews and then collect large amounts of data on the ratings and reviews posted on Amazon for these products, as well as their sales rank, advertising, and pricing behavior. We use this data to assess the costs and benefits of fake reviews to sellers and evaluate the degree to which they harm consumers. The theoretical literature on review fraud shows that there exist conditions when they harm consumers and other conditions where they function as simply another type of advertising. Using detailed data on product outcomes before and after they buy fake reviews we can directly determine if these are low-quality products using fake reviews to deceive and harm consumers or if they are possibly high-quality products who solicit reviews to establish reputations. We find that a wide array of products purchase fake reviews including products with many reviews and high average ratings. Soliciting fake reviews on Facebook leads to a significant increase in average rating and sales rank, but the effect disappears after roughly one month. After firms stop buying fake reviews their average ratings fall significantly and the share of one-star reviews increases significantly, indicating fake reviews are mostly used by low quality products and are deceiving and harming consumers. We also observe that Amazon deletes large numbers of reviews and we document their deletion policy.

Suggested Citation

  • He, Sherry & Hollenbeck, Brett & Proserpio, Davide, 2021. "The Market for Fake Reviews," MPRA Paper 105507, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:105507
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    Cited by:

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    2. Yassine Lefouili & Leonardo Madio, 2022. "The economics of platform liability," European Journal of Law and Economics, Springer, vol. 53(3), pages 319-351, June.
    3. Ishita Chakraborty & Joyee Deb & Aniko Oery, 2020. "When Do Consumers Talk?," Cowles Foundation Discussion Papers 2254R, Cowles Foundation for Research in Economics, Yale University, revised Mar 2021.
    4. Christoph Carnehl & Maximilian Schaefer & André Stenzel & Kevin Ducbao Tran, 2022. "Value for Money and Selection: How Pricing Affects Airbnb Ratings," Bristol Economics Discussion Papers 22/771, School of Economics, University of Bristol, UK.
    5. Daniel Ershov & Yanting, He & Stephan Seiler, 2023. "How Much Influencer Marketing Is Undisclosed? Evidence from Twitter," CESifo Working Paper Series 10743, CESifo.
    6. Georgios Zervas & Davide Proserpio & John W. Byers, 2021. "A first look at online reputation on Airbnb, where every stay is above average," Marketing Letters, Springer, vol. 32(1), pages 1-16, March.
    7. Wang, Qiang & Zhang, Wen & Li, Jian & Ma, Zhenzhong, 2023. "Complements or confounders? A study of effects of target and non-target features on online fraudulent reviewer detection," Journal of Business Research, Elsevier, vol. 167(C).
    8. Salminen, Joni & Kandpal, Chandrashekhar & Kamel, Ahmed Mohamed & Jung, Soon-gyo & Jansen, Bernard J., 2022. "Creating and detecting fake reviews of online products," Journal of Retailing and Consumer Services, Elsevier, vol. 64(C).
    9. Emily West, 2021. "Review Pollution: Pedagogy for a Post-Truth Society," Media and Communication, Cogitatio Press, vol. 9(3), pages 144-154.
    10. Young Joon Park & Jaewoo Joo & Charin Polpanumas & Yeujun Yoon, 2021. "“Worse Than What I Read?” The External Effect of Review Ratings on the Online Review Generation Process: An Empirical Analysis of Multiple Product Categories Using Amazon.com Review Data," Sustainability, MDPI, vol. 13(19), pages 1-22, September.
    11. Harrison-Walker, L. Jean & Jiang, Ying, 2023. "Suspicion of online product reviews as fake: Cues and consequences," Journal of Business Research, Elsevier, vol. 160(C).
    12. Hajek, Petr & Hikkerova, Lubica & Sahut, Jean-Michel, 2023. "Fake review detection in e-Commerce platforms using aspect-based sentiment analysis," Journal of Business Research, Elsevier, vol. 167(C).

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    More about this item

    Keywords

    Online platforms; consumer protection; e-commerce; word-of-mouth;
    All these keywords.

    JEL classification:

    • K42 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Illegal Behavior and the Enforcement of Law
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce
    • M21 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Business Economics - - - Business Economics
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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