When Novices have more Influence than Experts: Empirical Evidence from Online Peer Reviews

Over the past decade, online peer review platforms have played a major role in shaping consumer choice. Eliciting and displaying online reviews has become a priority for many firms as part of their marketing efforts to influence consumer decisions and stimulate firm sales. Just as firms have been interacting with expert professionals (Biswas, Biswas, and Das 2006; Wang 2005), firms are now also engaging with expert, or elite, users on peer review platforms (Chae et al. 2016; Stone 2014). Businesses invite expert users to try their products/services, with the objective of having expert users create and share high-quality reviews. Given the increasing engagement between businesses and elite users, we are interested in the relationship between user expertise and influence of user-generated reviews on consumers. To get a more descriptive sense of how consumers are influenced by online peer review platforms, let’s consider a situation where a consumer accesses a review website to make a choice on a service provider. Perhaps the consumer is at a conference in a new city, and decides to use a peer review website, such as tripadvisor.com, to find a restaurant for the evening. Consider the navigation process from accessing the user-generated review website to selecting a restaurant for the evening. She might begin by first narrowing down the options with a number of filters, including price range (cheap eats, midrange, fine dining), meal type (breakfast, lunch, brunch, dinner), and regions in the city which are located nearby. Even after the initial filters, she is likely presented with tens, if not, hundreds of restaurants. In order to narrow the list of restaurants for her consideration set, she might use aggregate-level measures, such as the volume of reviews and the user rating average; considering only restaurants that have lots of reviews and are highly rated. Finally, from the handful of restaurants left in consideration, the consumer may read several reviews of each in order to help finalize a choice of restaurant for the evening.