Organic Advertising? The Effect of Featured Review on Consumer Rating

AbstractWe investigate the effect of the Favorite Reviews (FR) feature on user behavior in an online user-generated content (UGC) platform. The FR feature, which allows business owners to pin one selected review near the top of their property page, can serve as a new advertising tool for business owners to promote their businesses using satisfied consumers. Specifically, this paper investigates the impact of such a feature on the quantity of new reviews on Relying on difference-in-differences strategies, we find that this feature distorts the distribution of new reviews toward a positive extreme. The observed growth in new five-bubble reviews is mainly driven by new users. The experienced users, however, reduce their contributions, on average. This observed effect might result in user concern over the credibility of the UGC platform.

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