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Title

The Impact of Negative Reviews on Online Search and Purchase Decisions.

Authors

Varga, Marton; Albuquerque, Paulo

Abstract

Despite evidence indicating the significant influence of online reviews on purchase decisions, even after considering a product's average rating (Vana and Lambrecht 2021), the underlying factors behind this effect and the broader impact of reviews on consumer decision making remain uncertain. This study uses clickstream data from a major online retailer to explore how negative reviews affect consumer search and purchase decisions. Leveraging exogenous variation created by the display of online reviews sorted by recency, the authors find that negative reviews significantly reduce a product's purchase probability because they (1) contrast with the often-high average product rating, (2) decrease the probability that consumers continue browsing for information about the focal product, (3) increase the probability of visiting the page of substitute products, and (4) increase the probability of viewing reviews about substitute products. Importantly, these effects apply to utilitarian products but not hedonic products and when reviews pertain to product functionality or customer service but not to taste-related factors. The authors estimate a product's vulnerability to negative reviews along two dimensions—purchase and search probability for substitutes—and display these effects on a two-dimensional map.

Subjects

CONSUMERS' reviews; INTERNET searching; SHOPPING; DECISION making; CONSUMER behavior

Publication

Journal of Marketing Research (JMR), 2024, Vol 61, Issue 5, p803

ISSN

0022-2437

Publication type

Academic Journal

DOI

10.1177/00222437231190874