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Quality Disclosures and Disappointment: Evidence from the Academy Nominations

Author

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  • Michelangelo Rossi
  • Felix Schleef

Abstract

This study examines the unintended consequences of quality disclosures, focusing on how Academy Award nominations impact consumer satisfaction in the movie industry. Awards, certifications, and nominations typically signal high quality and increase consumer expectations. Yet, if the experience falls short of the expectation, they may also lead to disappointment. Using a novel dataset from Movie-Lens, we analyze user ratings for movies surrounding Academy Award nominations from 1995 to 2019. We employ a difference-in-differences framework and a recommendation-based matching approach to isolate the “disappointment effect” showing a significant decline in ratings for nominated movies post-nomination. This effect accounts for more than 7% of the pre-nomination rating gap between nominated and non-nominated films and is most pronounced among less experienced users. Our findings are validated with data from IMDb, where the effect is even more pronounced, likely due to groupthink and public review dynamics. By isolating disappointment from selection and supply side responses, this study offers insights into the dual-edged nature of quality signals and their implications for consumer welfare.

Suggested Citation

  • Michelangelo Rossi & Felix Schleef, 2024. "Quality Disclosures and Disappointment: Evidence from the Academy Nominations," CESifo Working Paper Series 11573, CESifo.
    • Handle: RePEc:ces:ceswps:_11573
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    More about this item

    Keywords

    quality disclosure; movie industry; expectation formation; disappointment;
    All these keywords.

    JEL classification:

    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making

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