The Value of Social Dynamics in Online Product Ratings Forums

Research has shown that consumer online product ratings reflect both the customers' experience with the product and the influence of others' ratings. In this article, the authors measure the impact of social dynamics in the ratings environment on both subsequent rating behavior and product sales. First, they model the arrival of product ratings and separate the effects of social influences from the underlying (or baseline) ratings behavior. Second, the authors model product sales as a function of posted product ratings while decomposing ratings into a baseline rating, the contribution of social influence, and idiosyncratic error. This enables them to quantify the sales impact of observed social dynamics. The…