Inducing Consumer Online Reviews Via Disclosure
Zelong Yi and
Production and Operations Management, 2020, vol. 29, issue 8, 1956-1971
In this study, we investigate a seller's voluntary disclosure strategy when serving two groups of consumers who arrive sequentially and are reference dependent with respect to product quality. Consumers may be naive or sophisticated, depending on whether they can make rational inferences from the seller's disclosure behavior and an experienced consumer's quality review. We show that when consumers are naive, the seller can strategically withhold high‐quality information and disclose low‐quality information to boost the reference‐dependent early adopter's subjective quality review, which in turn enhances the follower's quality expectation and allows the seller to extract more surplus in the second period. However, when consumers are sophisticated, it is difficult for the seller to enhance their quality expectations by designing his disclosure strategy to manipulate the early adopter's quality review. The seller discloses all the quality information to consumers. When the market contains both naive and sophisticated consumers, the seller is able to withhold relatively low‐quality information in advance. In such a situation, the seller exclusively serves naive customers in the first period by charging a high retail price. The earlier results are quite robust, regardless of whether the review rating is bounded or whether consumers possess heterogeneous preferences with respect to product quality.
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1) Track citations by RSS feed
Downloads: (external link)
This item may be available elsewhere in EconPapers: Search for items with the same title.
Export reference: BibTeX
RIS (EndNote, ProCite, RefMan)
Persistent link: https://EconPapers.repec.org/RePEc:bla:popmgt:v:29:y:2020:i:8:p:1956-1971
Ordering information: This journal article can be ordered from
http://onlinelibrary ... 1111/(ISSN)1937-5956
Access Statistics for this article
Production and Operations Management is currently edited by Kalyan Singhal
More articles in Production and Operations Management from Production and Operations Management Society
Bibliographic data for series maintained by Wiley Content Delivery ().