The determinants of online review informativeness: Evidence from field experiments on Airbnb.
Published in Working Paper, 2017
Recommended citation: Fradkin, Andrey, Elena Grewal, and David Holtz. The determinants of online review informativeness: Evidence from field experiments on Airbnb. Working Paper, 2017.
Reputation systems are used by most digital marketplaces but their design varies greatly across websites. We use the setting of Airbnb to study how design choices affect the ability of ratings and reviews to aggregate information. We study two experimental changes to the reputation system of Airbnb. The first change offered guests a $25 coupon to submit a review. The second change implemented a simultaneous-review system, which eliminated strategic reciprocity from reviews. We show that both experiments made the reputation system more informative and use our findings to quantify the importance of mechanisms that cause inefficiency in reputation systems.