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The Role of AI in Online Reviews

Author

Listed:
  • Valeria Lermana
  • Oren Rigbi
  • Yaniv Dover

Abstract

The rapid adoption of large language models (LLMs) creates new opportunities for strategic content generation on online platforms, including potentially harmful forms of manipulation that may undermine platform effectiveness and reshape platform dynamics. However, measuring such activity is difficult because AI-generated content is rarely directly observable. We introduce an empirical approach that leverages discrete LLM supply shocks - abrupt changes in model prices and capabilities, and contrasts verified with non-verified reviews to identify changes in platform activity associated with generative AI supply improvements. We apply this approach to more than 13 million reviews from Trustpilot, one of the leading online platforms for business reviews. A robust finding is that following LLM supply shocks, unverified reviews shift toward greater negativity: more 1-stars, fewer 5-stars, and lower ratings, with effects driven primarily by new model releases and concentrated among firms with the lowest and highest review volumes, suggesting that strategic AI use may reshape platform competition dynamics. We further find that LLM supply shocks trigger short, concentrated bursts of review activity. Together, these findings suggest that generative AI is already reshaping how reputation and competition operate on online platforms.

Suggested Citation

  • Valeria Lermana & Oren Rigbi & Yaniv Dover, 2026. "The Role of AI in Online Reviews," CESifo Working Paper Series 12960, CESifo.
    • Handle: RePEc:ces:ceswps:_12960
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    References listed on IDEAS

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    Keywords

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    JEL classification:

    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • L15 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Information and Product Quality
    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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