Events

Professor Marc Fischer
Chair in Marketing Science and Analytics
Co-editor Journal of Marketing
University of Cologne

ABSTRACT

Deceptive reviews are a widespread phenomenon on Amazon.com, Yelp.com, and other platforms, attracting the interest of researchers from many different fields. Prior research has largely focused on the effects at the disaggregate level of players such as Amazon retailers who commit review fraud. The authors extend this perspective to the aggregate level of publicly listed firms whose products might be unintentionally affected by review fraud initiated by independent Amazon retailers to promote their own business. They explore whether deceptive product reviews on Amazon.com accumulate to an effect substantial enough to influence value creation for the brand-owning firms. The analysis uses more than 14 million online reviews associated with ca. 650,000 products sold by 288 publicly listed firms via Amazon in the years 2004–2018. The authors find evidence of a destroyed value of US$ 161m per firm and quarter, which shows for the first time that deceptive review activity imposes substantial costs on firms and the economy as a whole.