The effect of review valence and variance on product evaluations: An examination of intrinsic and extrinsic cues

Consumers are increasingly consulting online consumer reviews prior to purchase. This research seeks to deepen our understanding of how consumers utilize online reviews by examining the interplay between review valence (average rating) and variance in the context of intrinsic and extrinsic cues. We begin by demonstrating that consumers who consider review valence or variance in isolation are prone to making incorrect inferences about the other decision cue. Results further show that higher levels of review variance lower purchase intentions to a greater extent for utilitarian versus hedonic products and that these effects are amplified for negatively valenced products. Further, the interaction effect between review variance and reviewer ratings on purchase intention is found to be mediated by decision confidence. With two additional experiments we explore the influence of extrinsic cues in the form of brand equity and reviewer credibility. We find that when review variance is high, the influence of reviewer credibility on consumers' purchase intentions is moderated by brand equity. When brand equity is high, reviewer credibility does not influence consumers' purchase intentions; however when brand equity is low, reviewer credibility emerges as a significant diagnostic cue.