Exploratory Study on the Stability of Consumer Rationality in Judging Online Reviews

Exploratory Study on the Stability of Consumer Rationality in Judging Online Reviews

Makoto Nakayama (College of Computing and Digital Media, DePaul University, Chicago, IL, USA)
Copyright: © 2017 |Pages: 22
DOI: 10.4018/JECO.2017010101
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Abstract

Consumers are often asked valuate the quality of online reviews. However, they often misjudge the true value of reviews because their thoughts on reviews are not well formed with criteria. This exploratory study conducted stylized survey-based experiments using 217 consumers. Consumers typically underestimate the value of reviews because they do not always use valuation criteria when reading reviews. The extent of such underestimations ranges from 12% to 15% for goods with objective attributes like electronic products. In addition, nearly half of the consumers revised their review valuations upon taking a second look at the same review for these goods. Close to one-third of the consumers changed their review valuations for subjective goods like music albums. Such valuation changes are specific to consumer profiles. Their predominant emotional sentiment also has a varying effect on subjective and non-subjective goods.
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Introduction

Online consumer reviews (hereafter “consumer reviews” or simply “reviews”) are an important knowledge source for potential consumers, with close to 90% of them conducting online research before purchasing products and/or services (Deloitte, 2012). Popular products such as the Kindle e-reader model have well over 10,000 reviews posted on Amazon.com, but such continuous inflow of reviews can present information overload to consumers (Baek, Ahn, & Choi, 2012). To counter that, online shopping websites allow consumers to vote YES or NO if a review is helpful or not. This vote count is regarded as the de facto (and only available) indicator of review quality, and used to rank reviews. As exemplified by Amazon.com, reviews with the highest votes are often shown in prominent areas on the review pages. Thus, review valuations for votes play a critical role in how reviews are displayed and how frequently they are read by consumers.

Review helpfulness is based on the perceived diagnosticity or ability of a review to help consumers understand relevant product information and evaluate the quality and performance of a product (Mudambi & Schuff, 2010). However, despite their importance, review valuations are not necessarily consistent (Baek et al., 2012). First, consumers do not always have well-defined preferences in relation to product attributes, but rather such preferences are formed (Bettman, Luce, & Payne, 1998) as they search and learn. Consumers are willing to learn from other consumers because they believe that such knowledge leads to better decision making (Yang & Allenby, 2003). Second, previous research places emphasis on consumer rationality at varying degrees, ranging from choice modeling studies over brand, product, and price (Danaher, Roberts, Roberts, & Simpson, 2011; Ratchford, Lee, & Talukdar, 2003) to impulse buying studies (Parboteeah, Valacich, & Wells, 2009; Shen & Khalifa, 2012). That is, an individual’s judgment of the helpfulness of a review may not always be given a well-developed thought. In the context of purchase decisions, valuation criteria are judgment standards “by which purchase alternatives are evaluated [and they] represent an important dimension of the purchase decision” (Williams & Slama, 1995, p. 4). Criteria obviously play a critical role in consumer decision making (Olshavsky & Granbois, 1979; Shocker, Ben-Akiva, Boccara, & Nedungadi, 1991). For review helpfulness decisions, this paper regards valuation criteria (hereafter ‘criteria’) as standards by which consumers decide the outcome (Yes or No) in relation to important dimensions of the eventual purchase decision. However, consumers can focus on different aspects of reviews and may even evaluate them frivolously without using the same criteria from one review to another. Therefore, valuation criteria plays an important role in judging reviews and eventually leads to buying decisions. Third, reviews are the subjective, often partially formed opinions of other consumers about certain products. Incomplete opinions present obscure review contents, giving the targets of valuation criteria indistinct.

Therefore, the research questions of this paper are as follows: How does the use of criteria affect review helpfulness decisions? If it does, what factors influence the extent of helpfulness decision outcomes? This study posits that the users and non-users of criteria judge reviews differently. In addition, it postulates that such differences depend on the characteristics of goods and the profile of consumers. The emotional sentiment of consumers is also hypothesized as a factor.

In the next section, the theoretical background of the study is presented. After the hypotheses and their rationale are discussed, the paper outlines the methods and results, followed by implications and finally the conclusion.

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