An Exploratory Study of the Effects of Price Decreases on Online Product Reviews: Focusing on Amazon's Kindle 2

As online shopping proliferates, online product reviews (OPRs) play a crucial role in online consumers’ purchasing decisions. Although prior research on the effects of price changes on consumer reactions has provided insightful implications, little is known about the impact of price changes on the characteristics of OPRs. With the growing importance of OPRs as a key social recommendation system for potential consumers’ decision-making, it is important to understand the dynamics of OPRs around price changes. We select the Kindle 2 from Amazon.com as our focal product and conduct an exploratory case study. By analyzing 6,714 reviews on the Kindle 2, we examine how consumers respond to price decreases using OPRs. The results show that all four characteristics of OPRs (star-rating, review depth, positive emotion, and negative emotion) are significantly influenced by price decreases. Moreover, we found that the impacts of price decreases on OPRs’ characteristics are different between the first and the second attempts at price reduction. Interestingly, the number of reviews per day significantly soars immediately after the first price decrease, while there is no significant change in the number of reviews after the second price cut. We conclude the paper with a discussion of our findings.

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