Friday, October 12, 2012

STEPHEN Andrew T., BART Yakov, DU PLESSIS Christilene, GONCALVES Dilney
Does Paying for Online Product Reviews Pay Off? The Effects of Monetary Incentives on Consumers' Product Evaluations
INSEAD Working Paper 2012/96/MKT

Consumer-generated online product reviews have become an important and influential source of consumer information. Firms hope consumers will post positive and helpful reviews after experiencing their products or services. This, however, does not occur as often as firms would hope, and because of this many firms have adopted a more proactive approach to soliciting reviews. This paper examines the consequences of one of the main approaches: offering monetary incentives to consumers in exchange for reviews. Across four experiments, the authors show that when consumers are paid to write reviews they produce content perceived by other consumers as more helpful. However, disclosing incentive payment leads consumers reading reviews to lower their product quality expectations. This effect occurs because payment disclosure induces doubt in product quality, is found even when more objective information is available and irrespective of whether incentive disclosure is specific (e.g., “the reviewer was paid $1”) or ambiguous (e.g., “the reviewer was paid”), is present for different types of products, and carries over to effect consumers’ product evaluations even after first-hand product experience.