Title

Ratings Lead You to the Product, Reviews Help you Clinch it? The Dynamics and Impact of Online Review Sentiments on Product Sales

Publication Type

Working Paper

Publication Date

1-2009

Abstract

It is generally assumed that ratings are a numeric representation of text sentiments and their valences are consistent. This however may not always be true. Using a panel of data on over 4000 books from Amazon.com, we develop a multiple equation model to examine the inter-relationships between ratings, sentiments, and sales. We find that ratings do not have a significant direct impact on sales but have an indirect impact through sentiments. Sentiments, however, have a direct significant impact on sales. Our findings also indicate that the two most accessible types of reviews – most helpful and most recent – play a significant role in determining sales. This suggests that information that is easily accessible and cognitive effort-reducing heuristics play a role in online purchase decisions. This study advances our understanding on the inter-relationship between ratings, sentiments, and sales and sheds insight on the relevance of ratings and sentiments over a sequential decision making process.

Keywords

User-generated content, Online consumer reviews, Sentiments, Ratings, Interplay, Search and choice

Discipline

Computer Sciences | E-Commerce | Sales and Merchandising

Research Areas

Information Systems and Management; Marketing

Additional URL

http://dx.doi.org/10.1016/j.dss.2013.07.009

Comments

Published in Decision Support Systems, 2014, 57, 42-53. http://dx.doi.org/10.1016/j.dss.2013.07.009

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