Name
Abstract | ||
|---|---|---|
This paper examines the informational role of product ratings. We build a theoretical model in which ratings can help consumers figure out how much they would enjoy the product. In our model, a high average rating indicates a high product quality, whereas a high variance of ratings is associated with a niche product, one that some consumers love and others hate. Based on its informational role, a higher variance would correspond to a higher subsequent demand if and only if the average rating is low. We find empirical evidence that is consistent with the theoretical predictions with book data from Amazon.com and BN.com. A higher standard deviation of ratings on Amazon improves a book's relative sales rank when the average rating is lower than 4.1 stars, which is true for 35% of all the books in our sample. This paper was accepted by Pradeep Chintagunta, marketing. |
Year | DOI | Venue |
|---|---|---|
2012 | 10.1287/mnsc.1110.1458 | Management Science |
Keywords | Field | DocType |
high product quality,high average rating,average rating,higher subsequent demand,niche product,product ratings matter,higher standard deviation,higher variance,high variance,product rating,informational role,user generated content,social media | Econometrics,User-generated content,Economics,Social media,Empirical evidence,Microeconomics,Information transmission,If and only if,Standard deviation,Marketing | Journal |
Volume | Issue | ISSN |
58 | 4 | 0025-1909 |
Citations | PageRank | References |
25 | 1.06 | 10 |
Authors | ||
1 | ||