Too Much Information - Interaction Effects between WoM Valence and Other Sources of Social Information on Product Choice
(A2020-64112)

AUTHORS

Leonard Rackowitz, University of Hamburg; Michel Clement, University of Hamburg, Germany

KEYWORDS

Social influences; Online customer reviews; Choice-based conjoint experiment

ABSTRACT

Sources of social information, such as online customer reviews, rankings, trend information, and personalized recommendations are ubiquitous on the internet. Prior marketing research has focused on understanding how these information sources separately impact consumer decision making. However, often they are presented simultaneously. In this research, the authors measure interaction effects between WoM valence and other sources of social information by conducting a conjoint choice experiment. Applying a hierarchical Bayes estimation on a sample of 2,123 participants, the authors find that the importance of WoM valence for choice is significantly enhanced by greater WoM volume, an increasing sales trend, and a personalized recommendation, but is not affected by changes in the sales rank. When a product is rated three stars, consumers prefer one additional star over more reviews. The authors explain the underlying process responsible for the findings, and discuss management implications.