The Market for Reviews: Strategic Behavior of Online Product Reviewers with Monetary Incentives

Verena Dorner, Marcus Giamattei, Matthias Greiff

Publication: Scientific journalJournal articlepeer-review


Customer reviews reduce search cost and uncertainty about a product’s quality. Hence, the quantity and quality of reviews has positive impacts on purchase intentions, sales, and customer satisfaction. In order to increase review quality, retailers and online platforms employ different monetary incentives. We experimentally compare two different incentive schemes: an incentive scheme in which reviewers receive a flat salary, which is independent of review quality, and a tournament incentive scheme in which the reviewer who wrote the most helpful review receives a bonus payment. Helpfulness ratings are assigned by the other reviewers. In our experiment, adverse consequences arise under the tournament incentive scheme. Strategic considerations give rise to strategic downvoting, so that reviewers assign low helpfulness ratings to others’ reviews in order to maximize their expected payoffs. Review writing behavior remains unaffected: the tournament incentive scheme does not affect review quality. However, it does destroy the signaling power of helpfulness ratings.
Original languageEnglish
Pages (from-to)397 - 435
Journalzfbf Schmalenbachs Zeitschrift für betriebswirtschaftliche Forschung - Schmalenbach Business Review (SBR)
Issue number3
Publication statusPublished - 2020

Austrian Classification of Fields of Science and Technology (ÖFOS)

  • 502050 Business informatics

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