Investigating Consumers' Variety Seeking Behavior in the Light of Online Reviews: An Individual Level Panel Analysis

User-generated content, such as online reviews, has grown rapidly on the Internet with the support of Web 2.0 technologies. Although previous studies have documented the relationship between online reviews and products sales, our understanding about how online reviews take effect at the individual consumer level is limited. We investigate consumers' variety seeking behavior under the influence of online reviews. Based on prospect theory and the competition literature, we posit that online reviews influence consumers' variety seeking through the information and competition effects. We test our hypotheses by using consumers' purchase records and review data from a popular restaurant review website. Our data analysis results support our hypotheses. This study contributes to the online review literature by showing how individual consumers engage, perceive, and use online information channels in relation to purchase behaviors. We draw implications about how firms can effectively market with new digital media contents, such as online reviews.

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