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Taking Fake Online Consumer Reviews Seriously

Justin Malbon ()

Journal of Consumer Policy, 2013, vol. 36, issue 2, 139-157

Abstract: Evidence discussed in this article indicates that consumers rely heavily upon consumer reviews when making decisions about which products and services to purchase online. Sellers and their marketeers are aware of this, and as a result, some of them succumb to the temptation to generate fake consumer reviews. This article argues that policymakers and regulators need to take fake reviews seriously. This is because they undermine a (potentially) effective and efficient mechanism for overcoming information asymmetry between online sellers and buyers. Consumer reviews also offer a powerful mechanism for regulating the marketplace. Sellers who sell sub-standard products or engage in sub-standard selling practices risk reputational damage. Genuine consumer reviews can therefore moderate bad seller behaviour and assist in improving the quality and efficiency of the marketplace. Although there are laws in many jurisdictions that prohibit misleading and deceptive conduct, detecting fake reviews is complex and difficult. This article proposes that one way of increasing the effectiveness of regulatory oversight is for regulators to add an “alliance approach” to their existing arsenal of regulatory systems and mechanisms. Copyright Springer Science+Business Media New York 2013

Keywords: Internet or online consumer market; Consumer reviews; Information asymmetry; Regulatory systems; Consumer protection (search for similar items in EconPapers)
Date: 2013
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Journal of Consumer Policy is currently edited by Hans Micklitz, John Thøgersen, Lucia A. Reisch, Alan Mathios and Christian Twigg-Flesner

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