Ratings with Heterogeneous Preferences

We examine how product ratings are interpreted in the presence of heterogeneous prefer ences among both raters and consumers. Raters with altruistic motives should rate for the benefit of future consumers, however an ambiguity arises when preferences are heteroge neous. Multiple equilibria exist in which ratings may reflect the preferences of raters or the preferences of future consumers. In an online experiment, we examine how ratings are se lected by raters and interpreted by consumers, and how information about rater preferences or product attributes can influence equilibrium selection. We find that raters tend to rate based on their own preferences and that consumers largely anticipate this behavior.