Moderating effect of economic incentives on review helpfulness

Abstract

A vital aspect of the importance of online reviews is that the review is perceived to be helpful by the potential customer reading the review. (Mudambi and Schuff 2010) Helpfulness can be seen as a reflection of review diagnosticity, which is the extent to which the review helps users make informed purchase decisions. (Chua and Bannerjee 2014) Having more helpful reviews can greatly improve the consumers overall experience and positively affect the consumers attitudes. Therefore, companies have an incentive to not only show reviews, but to show reviews that customers perceive to be valuable. As such, a more in-depth research is needed on the consequences of economic incentives on the helpfulness of the review. Relatively few papers have researched the consequences of incentivized reviews, and are mostly of a qualitative nature (Ahrens et al, 2013). Therefore, this study aims understand the influence of economic incentives on the relationship between factors of review helpfulness and review helpfulness itself, using empirical data. I find that incentives moderate only the effect of reviewer profile on review helpfulness, and that reviewer profile contributes meaningfully to review helpfulness when incentives are present. Overall, this analysis contributes to the understanding of what makes a customer review helpful in the purchase decision process, taking into consideration the presence of incentives.