Study examines the impact of fake online reviews on sales

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Can you really trust that online product review before making a purchase decision? New research has found that the practice of falsifying online product reviews may be more widespread than you think.

According to researchers, a wide range of product marketers buy fake online reviews through an online marketplace found through social media. As a result, marketers receive a lot of reviews and high average ratings on ecommerce sites, including Amazon, Walmart, and Wayfair.

The study, published in the current issue of the journal INFORMS Marketing Science“The Market for Fake Reviews” was written by Sherry He and Brett Hollenbeck of the UCLA Anderson School of Management, and Davide Proserpio of the Marshall School of Business at the University of Southern California (USC).

“We started by studying the economics and manipulation of reviews and their effect on sales results, consumer well-being and platform value,” He says. “Despite the fact that buying online reviews is illegal, we have been able to document the existence of large and active online markets for fake reviews.”

Here’s how it works: Sellers post in private online groups to promote their products. They then pay customers to buy certain products and leave positive reviews. These social media groups exist for a number of online retailers.

“For our research, we decided to focus on Amazon as it is the largest and most developed market,” says Hollenbeck. “We collected data from this market by sending research assistants to these social media groups to document which product marketers bought fake reviews and when. Then we tracked the results of these products on Amazon.com. This included reviews, ratings, prices, and sales rank.”

The researchers found that buying fake reviews is associated with a significant, but short-term, increase in the average rating and the total number of reviews. They found that there is a certain rating manipulation that also has a causal effect on sales. They also found that after companies stopped buying fake reviews, the average ratings of their products dropped and the proportion of one-star reviews tended to increase. This, they concluded, indicates that rating manipulation primarily targets low-quality products.

To conduct their research, the study authors built a sample of about 1,500 products that were observed over a nine-month period to get fake reviews. The researchers found that the types of products involved represented many categories. They then tracked the results of these products before and after buying fake reviews and were able to document how the platform, in this case Amazon, regulates fake reviews.

“For the products seen in our research buying fake reviews, about half of their reviews were eventually removed, but the takedowns occurred with an average delay of more than 100 days, allowing sellers to take advantage of the short-term boost in reviews , reviews, and sales,” says Proserpio. “Almost none of the sellers who bought fake reviews were well-known brands. This is consistent with other research that has shown that online reviews are more effective and important for smaller, lesser-known brands.”


Research finds top reviews, not average ratings, influence consumer decision-making


More information:
Sherry He et al, The Market for Fake Reviews, Marketing Science (2022). DOI: 10.1287/mksc.2022.1353

Provided by Institute for Operations Research and the Management Sciences

Quote: Study examines the impact of fake online reviews on sales (2022, September 9,), retrieved September 10, 2022 from https://phys.org/news/2022-09-impact-fake-online-sales.html

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