Strategic Manipulation of Online Reviews : An Experimental Investigation of Consumers’ Response

Buyers’ growing reliance on online consumer reviews as a primary source of product information has created increasing incentives for firms to manipulate reviews to their advantage. While manipulated reviews can impact immediate sales, their effects on buyers’ post-consumption response in terms of repurchase decisions as well as subsequent review ratings have remained mostly unexamined. In a series of experiments involving a product and a professional service, we find that the misinformation in manipulated reviews is not neutralized by crowd correction. Rather, it triggers a chain of cascading biased reviews in the direction of manipulations, posing serious threats to the efficiency of markets. Our results show that there is a direct, near linear relationship between the magnitude of manipulation and its effect on consequent genuine reviews. In addition, we find that the bias caused by manipulated reviews differs across genders according to each gender’s actual or perceived domain knowledge