Xin Zheng, Jisu Cao, Yili Hong, Sha Yang, and Xingyao Ren

MIS Quarterly 2022.10

Recommend Reason

Product variety and complexity both increase as the economy grows. To evaluate products that differ on multiple attributes or dimensions, consumers commonly engage in an extensive information search, particularly for high-involvement products such as electronics, appliances, and automobiles. To help consumers make better purchase decisions, many online review platforms have started to implement multi-dimensional rating systems wherein a user provides ratings and textual comments on multiple product dimensions. While prior work on the impact of overall product reviews has considered different product categories, none have studied such nuanced impacts in a setting of multi-dimensional rating system. The objective of this study is to fill in this knowledge gap by answering the following two questions. First, how does inter-dimensional (i.e., cross-dimensions) rating variance affect the sales of niche products differently from mainstream products? Second, how do intra-dimensional (i.e., cross-reviewers) rating valence and variance on the dominant dimension of a product respectively affect the sales of mainstream products differently from niche products? To answer the research questions, this paper adopted a multi-method approach by combing a field study with three lab experiments. This paper makes three contributions to the literature on online reviews. First, this is the first study that decomposes rating variances into inter-dimensional (i.e., cross-dimensions) rating variance and intra-dimensional (i.e., cross-reviewers) rating variance and examines their respective effects on sales of mainstream vs. niche products. Second, the current work extends the emerging research on multi-dimensional online review systems by revealing the importance of product type (i.e., mainstream vs. niche) in affecting the way multi-dimensional product ratings influence sales. Third, we report a first study that explores the effect of dominant dimension in multi-dimensional online review systems.

About the Author

Xin Zheng, Department of Marketing, School of Economics and Management, Tongji University

Jisu Cao, Department of Operations and Information Management, School of Business, University of Connecticut

Yili Hong, Department of Business Technology, Miami Herbert Business School, University of Miami

Sha Yang, Department of Marketing, Marshall Business School, University of Southern California

Xingyao Ren, Department of Marketing, Business School, Nankai University

Keywords

Online reviews, multi-dimensional ratings, product sales, mainstream product, niche product, dominant dimension

Brief Introduction

Despite a large body of literature on online reviews, none have considered the nuanced impacts of how multi-dimensional reviews affect products sales differently for mainstream vs. niche products. This study aims at filling this knowledge gap by conducting complementary studies in two product categories (i.e., automobile and laptop) with different methods (a field study and three lab experiments). Our paper reveals three key insights to the emerging literature and phenomenon on multi-dimensional review systems: (a) the inter-dimensional rating variance is more negatively related to product sales for a mainstream product than for a niche product in the same category; (b) the intra-dimensional rating valence on the dominant dimension of a product is more positively related to product sales for a niche product than for a mainstream product; and (c) the intra-dimensional rating variance on the dominant dimension of a product is more negatively related to product sales for a niche product than for a mainstream product. Our research provides important managerial implications to both product providers and review platforms.

Link https://doi.org/10.25300/MISQ/2022/15469