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Production of Online Word‐of‐Mouth: Peer Effects and the Moderation of User Characteristics

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  • Yang Wang
  • Paulo Goes
  • Zaiyan Wei
  • Daniel Zeng

Abstract

We study peer effects on individuals’ contributions to a major form of word of mouth—online reviews. Provided by either consumers or third‐party professionals, online reviews influence consumer purchasing decisions and hence sales. Individuals have conflicting incentives of free riding and contributing to social capital when writing reviews. We leverage a “natural experiment,” which led to an exogenous expansion in the user population of a major online review platform, to better understand the trade‐off. Our empirical findings are mainly twofold. First, we find that a larger population of audience and peer review writers, an immediate consequence of the exogenous shock, cause individuals to write more reviews with higher quality and assign higher but also more diverse ratings. In addition, we find heterogeneity in peer effects by user activeness, expertise, and popularity. Our findings have implications for companies in managing online feedbacks and for platforms that rely on user contributions.

Suggested Citation

  • Yang Wang & Paulo Goes & Zaiyan Wei & Daniel Zeng, 2019. "Production of Online Word‐of‐Mouth: Peer Effects and the Moderation of User Characteristics," Production and Operations Management, Production and Operations Management Society, vol. 28(7), pages 1621-1640, July.
    • Handle: RePEc:bla:popmgt:v:28:y:2019:i:7:p:1621-1640
    DOI: 10.1111/poms.13007
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    Cited by:

    1. Sulin Ba & Yuan Jin & Xinxin Li & Xianghua Lu, 2020. "One Size Fits All? The Differential Impact of Online Reviews and Coupons," Production and Operations Management, Production and Operations Management Society, vol. 29(10), pages 2403-2424, October.
    2. Zibo Liu & Zhijie Lin & Ying Zhang & Yong Tan, 2022. "The Signaling Effect of Sampling Size in Physical Goods Sampling Via Online Channels," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 529-546, February.
    3. Wen Zhang & Qiang Wang & Jian Li & Zhenzhong Ma & Gokul Bhandari & Rui Peng, 2023. "What makes deceptive online reviews? A linguistic analysis perspective," Palgrave Communications, Palgrave Macmillan, vol. 10(1), pages 1-14, December.
    4. Jingchuan Pu, 2022. "Do Online Communities Improve Job Performance in the Geographically Dispersed Organization?," Production and Operations Management, Production and Operations Management Society, vol. 31(2), pages 403-421, February.
    5. Dominik Gutt & Jürgen Neumann & Wael Jabr & Dennis Kundisch, 2020. "The Fate of the App: Economic Implications of Updating under Reputation Resetting," Working Papers Dissertations 76, Paderborn University, Faculty of Business Administration and Economics.
    6. Marios Kokkodis & Theodoros Lappas & Gerald C. Kane, 2022. "Optional purchase verification in e‐commerce platforms: More representative product ratings and higher quality reviews," Production and Operations Management, Production and Operations Management Society, vol. 31(7), pages 2943-2961, July.
    7. Jingchao Zhou & Jinfeng Wu & Zihao Wang, 2023. "Destination Reputation Management: The Divergent Role of Tourists’ Word of Mouth in Urban China," Sustainability, MDPI, vol. 15(16), pages 1-16, August.
    8. Kyungmin Park & Stephanie Lee & Shahryar Doosti & Yong Tan, 2023. "Provision of helpful review videos: Effects of video characteristics on perceived helpfulness," Production and Operations Management, Production and Operations Management Society, vol. 32(7), pages 2031-2048, July.
    9. Zhanfei Lei & Dezhi Yin & Sabyasachi Mitra & Han Zhang, 2022. "Swayed by the reviews: Disentangling the effects of average ratings and individual reviews in online word‐of‐mouth," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2393-2411, June.
    10. Yue Jin & Yong Tan & Jinghua Huang, 2022. "Managing contributor performance in knowledge‐sharing communities: A dynamic perspective," Production and Operations Management, Production and Operations Management Society, vol. 31(11), pages 3945-3962, November.
    11. Zaiyan Wei & Mo Xiao & Rong Rong, 2021. "Network Size and Content Generation on Social Media Platforms," Production and Operations Management, Production and Operations Management Society, vol. 30(5), pages 1406-1426, May.
    12. Shane Greenstein & Grace Gu & Feng Zhu, 2021. "Ideology and Composition Among an Online Crowd: Evidence from Wikipedians," Management Science, INFORMS, vol. 67(5), pages 3067-3086, May.

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