The importance of being earnest: Mandatory vs. voluntary disclosure of incentives for online product reviews

Research output: Journal PublicationsJournal Article (refereed)peer-review

Abstract

Many sellers provide incentives for online product reviews to influence consumer perceptions and purchase decisions. Although relevant laws require disclosure of such incentives, compliance has been low as sellers fear that it may dampen consumer trust and product sales. We analyze product reviews on Amazon.com and find that reviews with mandatory disclosures by platform are associated with lower product ratings thus have a restraining effect on reviewers, while voluntary disclosures by reviewers lead to higher ratings, thus a potential upward bias due to moral licensing. Regression analyses based on propensity score matching show that in comparison with voluntary disclosures, mandatory disclosures have a positive effect on review helpfulness and sales, thus benefitting both sellers and consumers. These findings provide novel insight into the disclosure of incentives for online product reviews and have broad implications for e-marketing, consumer welfare, and public policy in the platform economy.
Original languageEnglish
Pages (from-to)633-645
JournalJournal of Business Research
Volume141
Early online date1 Dec 2021
DOIs
Publication statusE-pub ahead of print - 1 Dec 2021

Bibliographical note

Funding Information:
The authors acknowledge the financial support of Lingnan University, Hong Kong for this research (Faculty Research Grant 101144).

Publisher Copyright:
© 2021 Elsevier Inc.

Keywords

  • Disclosure
  • E-commerce
  • Helpfulness votes
  • Incentives
  • Online product reviews
  • Product sales
  • Review bias

Fingerprint

Dive into the research topics of 'The importance of being earnest: Mandatory vs. voluntary disclosure of incentives for online product reviews'. Together they form a unique fingerprint.

Cite this