Fake reviews in online marketplaces are much more nefarious thank you might think. In addition to being annoying, a new working paper has found evidence that fake reviews on online stores like Amazon might get you to buy lower quality products as well as spend more money.
Marketplaces have long been a part of human history, from bartering over bread in the town square to the hyper-consumerism of Amazon, one main feature has evolved: reviews. In theory, online marketplaces exclusively publish honest reviews by real people who have actually purchased the product, but fake reviews run rampant, and a new paper has found evidence that these fake reviews could be seriously affecting consumers. The paper, which was presented this week at the National Bureau of Economic Research Summer Institute, found that not only do fake reviews get users to buy lower quality products but also get users to spend upwards of 12 extra cents per dollar.
The paper, which is authored by researchers at the Behavioralist, the University of Oxford, and the University of Southern California, describes an experiment in which 10,000 UK adults shopped on an Amazon-like platform for one of three products: headphones, dash-cams, or cordless vacuum cleaners. However, these shoppers were secretly broken into six groups, and shown different types of reviews for those products. For example, the control group saw informative reviews that were closely correlated with the quality of the product, while another group saw reviews with exaggerated star ratings, and another saw reviews that were suspicious and referred to a different product.
After analysis, the researchers found that the fake reviews were more likely to convince shoppers to purchase lower quality items, while also getting them to spend upwards of 12 extra cents for each dollar. On the flip side, the researchers also found that the effect that fake reviews have on shoppers is less when those shoppers are sceptical of how authentic those reviews are, and that education on how to spot fake reviews wound up making shoppers in the study more savvy.
The authors argue that this research is one of the first studies to characterise the negative effects of fake reviews on e-commerce platforms like Amazon and Facebook. Fake reviews are rampant in online stores, and Amazon is trying to get in front of them — the company announced earlier this week that it filed lawsuits against the administrators of over 10,000 Facebook groups that were a part of an effort to leave fake reviews on Amazon in exchange for financial compensation or free items.