Unveiling the Discrepancy between Reviewer Intent and Consumer Interpretation (Joint work with May Yuan and Leilei Gao)

Consumers frequently rely on online product ratings, such as those on platforms like Yelp and Amazon, when making purchase decisions. However, do consumers accurately interpret product ratings provided by reviewers? This research identifies a discrepancy between how reviewers (i.e., consumers who have completed the purchase) assign product ratings and how readers (i.e., potential consumers) interpret them. We find that, while reviewers have already incorporated both product quality and price into their ratings, potential consumers tend to oversimplify product ratings information and perceive a product’s overall rating as a direct indicator of its quality only. This oversimplification results in consumers’ unintentional double-counting of price in their decision-making. Consequently, consumers may end up choosing a lower-priced product with potentially lower quality, deviating from reviewer recommendations. This research provides empirical evidence for this discrepancy through real-world consumer ratings analysis (N = 628,340 ratings) as well as five experiments (N = 2,404) and discusses potential managerial interventions. 

This seminar will take place in person in T08-67. Alternatively, click here to join the seminar online.