NEW YORK - E-commerce has seen continued growth since the onset of the pandemic, making product reviews more relevant than ever before. Now, new research from Columbia Business School sheds light on what is making reviews so compelling. While it may seem obvious that companies should hide unfavorable information about their products, Kinshuk Jerath, Professor of Business at Columbia Business School, finds that consumers are actually more likely to seriously consider purchasing a product - and go forward with it - if they are exposed to ‘unfavorable information’, especially if their belief is that the product may not be suitable for them. According to the new research, consumer’s processing of information actually decreases if they are exposed only to favorable information, and consumers who are exposed to a mix of both positive and negative reviews are more likely to purchase a product than those who are only exposed to positive reviews.

The study, co-written with Chinese University of Hong Kong Assistant Professor, Qitian Ren, takes a new approach to the theory of confirmation bias by applying a mathematical model that determines how much confirmatory and disconfirmatory information a consumer will search relative to their pre-held beliefs. The authors find that consumers rationally search for confirmatory information especially if their pre-held beliefs are strong.

The pandemic has forced consumers to stay home, avoid shopping in person, and rely on online product information to make their purchasing decisions. The study’s findings can inform retailers seeking consumers’ attention in the crowded online shopping market boosted during the pandemic, that strategic product reviews can have a major impact. Beyond online shopping, the research has broader implications for the way we make all choices ranging from how you vote, where you work, attend school and other life choices. For sellers, the study sets out to prove that they have less incentive to suppress unfavorable reviews when the consumer already has an unfavorable view about a product.

The study, Consumer Attention to Favorable and Unfavorable Product Information, and Firm Information Design, is available online here.

To learn more about the cutting-edge research being conducted at Columbia Business School, please visit www.gsb.columbia.edu.

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