Value of multi-dimensional rating systems: An information transfer view

Ying Liu, Pei-yu Chen, Yili Hong

Research output: Chapter in Book/Report/Conference proceedingConference contribution

7 Scopus citations

Abstract

This paper empirically examines the value of multi-dimensional online rating system (versus single-dimensional online rating system) from an information transfer perspective. Our key identification strategy hinges on a natural experiment that took place on TripAdvisor.com that allows us to identify the causal effect with a difference-in-difference approach. Our key findings, first show that consumers' ratings for the same restaurants are significantly higher in TripAdvisor after its adoption of the multidimensional rating system. Second, we show that restaurants with lower price level benefit more from rating system change. Third, we show that the ratings in single-dimensional rating system are similar to the lowest dimension in the multi-dimensional system. The results demonstrate the information value of multi-dimensional ratings. Our study provides important implications for a better design of online WOM systems to help consumers match their preferences with product/service attributes.

Original languageEnglish (US)
Title of host publication35th International Conference on Information Systems "Building a Better World Through Information Systems", ICIS 2014
PublisherAssociation for Information Systems
StatePublished - 2014
Event35th International Conference on Information Systems: Building a Better World Through Information Systems, ICIS 2014 - Auckland, New Zealand
Duration: Dec 14 2014Dec 17 2014

Other

Other35th International Conference on Information Systems: Building a Better World Through Information Systems, ICIS 2014
CountryNew Zealand
CityAuckland
Period12/14/1412/17/14

Keywords

  • Difference-indifference
  • Multi-dimensional rating system
  • Natural experiment
  • WOM performance

ASJC Scopus subject areas

  • Information Systems
  • Computer Science Applications

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  • Cite this

    Liu, Y., Chen, P., & Hong, Y. (2014). Value of multi-dimensional rating systems: An information transfer view. In 35th International Conference on Information Systems "Building a Better World Through Information Systems", ICIS 2014 Association for Information Systems.