Online customer reviews and product sales: The moderating role of signal characteristics

Ying Wang, Miguel Aguirre-Urreta, Jaeki Song

Research output: Chapter in Book/Report/Conference proceedingConference contributionpeer-review

Abstract

Although considerable research has been conducted to investigate how online reviews influence product sales, understanding of why consumers rely on online reviews and the effect of interactions between key metrics (volume, valence, and variance) on product sales is very limited. We develop a research framework by applying information economics and signaling theory to demonstrate that online reviews have an impact on product sales because reviews act as market signals that contain information about the quality of products. The characteristics of signals (intensity, valence, consistency, and clarity) help consumers in reducing search cost and improving evaluations on product quality. We propose that signal intensity and signal consistency moderates the relationship between online reviews and product sales. Regarding methodological contribution, we propose a multilevel text mining approach to analyze online reviews by considering nested structure of reviews and uniqueness of individual review. The results of a pilot study and discussions are presented as well.

Original languageEnglish
Title of host publicationAMCIS 2017 - America's Conference on Information Systems
Subtitle of host publicationA Tradition of Innovation
PublisherAmericas Conference on Information Systems
ISBN (Electronic)9780996683142
StatePublished - 2017
EventAmerica�s Conference on Information Systems: A Tradition of Innovation, AMCIS 2017 - Boston, United States
Duration: Aug 10 2017Aug 12 2017

Publication series

NameAMCIS 2017 - America's Conference on Information Systems: A Tradition of Innovation
Volume2017-August

Conference

ConferenceAmerica�s Conference on Information Systems: A Tradition of Innovation, AMCIS 2017
CountryUnited States
CityBoston
Period08/10/1708/12/17

Keywords

  • Information economics
  • Latent Dirichlet allocation
  • Multilevel modeling
  • Online review
  • Signaling theory

Fingerprint Dive into the research topics of 'Online customer reviews and product sales: The moderating role of signal characteristics'. Together they form a unique fingerprint.

Cite this