The Informational Role of Online Product Review Distributions: An Experimental Study of Biases in Online Product Reviews

Previous studies have identified the impact of self-selection biases in online product reviews on consumer surplus. However, no empirical study has studied how the consumers evaluate the rating distributions of online reviews, especially when credibility of reviews is susceptible to be jeopardized by self-selection biases. This study investigates how the existence of different types of self-selection biases in online product reviews influences consumers’ intentions to purchase products and post reviews. A 2×2×2 randomized experiment was conducted to examine the role of two self-selection biases (underreporting and purchasing biases). Results indicate that subjects exposed to online product reviews that suffer from underreporting bias and purchasing bias have a significantly lower intention to purchase a product and post a review. Because consumers are not able to fully correct the self-selection biases in online product reviews, this study calls for the need to overcome self-selection biases and formulate strategies to help consumers trust online product reviews.