The Impact of User Review Volume on Consumers’ Willingness-to-Pay: A Consumer Uncertainty Perspective


With the increasing product offers on the internet, product reviews become more important. Subsequently, the statistics towards these reviews act as criterion for consumers. Important statistics include review volume, review valence, and review variance (Tsekouras, D., 2017). According to Jang et al. (2012) these statistics serve as a decision tool for consumers. More specifically, high review volume can increase the exposure of a business or product offering and high review valence also increases product consideration (Jang et al., 2012). There is a lot of research done towards these important statistics, however the findings were inconsistent. The most important reason for this, is the wrong assumption in previous research that online reviews have equal impact on different consumers. This study will fill this gap.

This study includes two different methods of research: an experiment and an empirical study. This is the main strength of the article. Both research methods are conducted in order to investigate how consumers use statistics in online reviews to form their WTP toward different online sellers. The authors focus on WTP because the impact of user reviews on price is inconclusive and a fuller understanding of this relationship contains direct implications for enhancing targeted pricing and promotion strategies.

First of all, an experiment was conducted in order to test the internal validity of the framework. The authors asked 143 undergraduate students with a scenario where they needed to purchase a new LCD TV of $800. The researchers showed the subjects a list of sellers with different review profiles and asked them to report the

maximum price they were willing to pay each seller for the TV. Results of this experiment support, except for the hypothesis H4a, the whole theoretical framework. The relationship between review volume and WTP varies not only by individual, but also by review valence (Wu & Wu, 2016).

The empirical study is conducted for two reasons. establishing external validity and sterile lab setting may not perfectly reflect the consumer decision process as it naturally occurs in online markets (Wu & Wu, 2016). They select the online auction site eBay.com for use in our empirical study because the prices that consumers bid on

products are directly observable on the site and because user reviews are critical for eBay sellers’ success. Results of this empirical research emphasized that consumers differ in their preferences toward review volume. More specifically, this research shows review volume positively influences consumer WTP. The authors provide evidence that consumer preferences for review volume and review variance not only differ across individuals, but also change with review valence within individuals.

In conclusive the experiment and the empirical study shows that consumers’ preferences regarding review statistics are different. Moreover, the study shows that a consumer’s preference regarding review volume may shift: a consumer may be willing to pay more to a seller with a higher volume, but only when valence reaches a certain level. An implication of this research is the short period of data collection. To provide more reliable evidence towards the phenomenon of the heterogeneity of consumers regarding the review statistics, further research has to select more data over a longer period.

References

Jang, S., Prasad, A. and Ratchford, B.T. (2012) How Consumers Use Product Reviews in the Purchase Decision Process. Marketing letters. Vol. 23 (3), pp. 825-838

Tsekouras, D. (2017). Customer Centric Digital Commerce. Session 5 slide 13.

Wu, Y. and Wu, J. (2016). The Impact of User Review Volume on Consumers’ Willingness-to-Pay: A Consumer Uncertainty Perspective. Journal of interactive marketing. Vol 33, pp. 43-56

 

 

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