TY  - JOUR
AU  - Mayzlin,Dina
AU  - Dover,Yaniv
AU  - Chevalier,Judith A.
TI  - Promotional Reviews: An Empirical Investigation of Online Review Manipulation
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 18340
PY  - 2012
Y2  - August 2012
UR  - http://www.nber.org/papers/w18340
L1  - http://www.nber.org/papers/w18340.pdf
N1  - Author contact info:
Dina Mayzlin
USC Marshall School of Business
701 Exposition Boulevard 
Los Angeles, CA 90089-0808
E-Mail: mayzlin@marshall.usc.edu

Yaniv Dover
Tuck School of Business at Dartmouth
100 Tuck Hall
Hanover, NH 03755
E-Mail: yaniv.dover@tuck.dartmouth.edu

Judith A. Chevalier
Yale School of Management
135 Prospect Street
New Haven, CT  06520
Tel: 203/432-3122
Fax: NA
E-Mail: judith.chevalier@yale.edu
AB  - Online reviews could, in principle, greatly improve consumers' ability to evaluate products. However, the authenticity of online user reviews remains a concern; firms have an incentive to manufacture positive reviews for their own products and negative reviews for their rivals. In this paper, we marry the diverse literature on economic subterfuge with the literature on organizational form. We undertake an empirical analysis of promotional reviews, examining both the extent to which fakery occurs and the market conditions that encourage or discourage promotional reviewing activity. Specifically, we examine hotel reviews, exploiting the organizational differences between two travel websites: Expedia.com and TripAdvisor.com. While anyone can post a review on TripAdvisor, a consumer can only post a review of a hotel on Expedia if she actually booked at least one night at the hotel through the website. We examine differences in the distribution of reviews for a given hotel between TripAdvisor and Expedia. We exploit the characteristics of a hotel's neighbor. We show that hotels with a nearby neighbor have more one- and two-star (negative) reviews on TripAdvisor relative to Expedia. We argue that the net gains from promotional reviewing are likely to be highest for independent hotels that are owned by single-unit owners and lowest for branded chain hotels that are owned by multi-unit owners. Our methodology thus isolates hotels with a disproportionate incentive to engage in promotional reviewing activity. We show that the hotel neighbors of hotels with a high incentive to fake have more one- and two-star (negative) reviews on TripAdvisor relative to Expedia than do hotels whose neighbors have a low incentive to fake. Furthermore, we show that hotels with a high incentive to fake have a greater share of five-star (positive) reviews on TripAdvisor relative to Expedia.
ER  -