The Market for Fake Reviews

Sherry He (), Brett Hollenbeck and Davide Proserpio ()
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Sherry He: Anderson School of Management, University of California, Los Angeles, Los Angeles, California 90095
Davide Proserpio: Marshall School of Business, University of Southern California, Los Angeles, California 90089

Marketing Science, 2022, vol. 41, issue 5, 896-921

Abstract: We study the market for fake product reviews on Amazon.com. Reviews are purchased in large private groups on Facebook and other sites. We hand-collect data on these markets and then collect a panel of data on these products’ ratings and reviews on Amazon, as well as their sales rank, advertising, and pricing policies. We find that a wide array of products purchase fake reviews, including products with many reviews and high average ratings. Buying fake reviews on Facebook is associated with a significant but short-term increase in average rating and number of reviews. We exploit a sharp but temporary policy shift by Amazon to show that rating manipulation has a large causal effect on sales. Finally, we examine whether rating manipulation harms consumers or whether it is mainly used by high-quality products in a manner like advertising or by new products trying to solve the cold-start problem. We find that after firms stop buying fake reviews, their average ratings fall and the share of one-star reviews increases significantly, particularly for young products, indicating rating manipulation is mostly used by low-quality products.

Keywords: word of mouth; electronic commerce; retailing (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (21)

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http://dx.doi.org/10.1287/mksc.2022.1353 (application/pdf)

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Working Paper: The Market for Fake Reviews (2021)
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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:41:y:2022:i:5:p:896-921

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