The Effect of the Dispersion of Review Ratings on Evaluations of Hedonic Versus Utilitarian Products

ABSTRACT

Using the information-diagnosticity framework, this study demonstrates that when exposed to highly versus lowly dispersed ratings, consumers evaluate hedonic products more positively than they do utilitarian products. Three experiments offer evidence to support this prediction, by comparing music files and car navigation devices (Experiment 1), fiction books and driver’s license test preparation books (Experiment 2), and two smartphone apps, a comic book and a voice translator (Experiment 3). Compared to lowly dispersed ratings, highly dispersed ratings improve the evaluation of hedonic products by reducing the perceived uncertainty of how accurately one can predict decision outcomes in terms of achieving the decision goals. The proposed effect also emerges as more pronounced when the average ratings are high rather than low. This observation adds refinements to existing reference-dependent models by showing that the pursuit of hedonic goals reverses general preferences for low over high dispersions of ratings at high average levels. Overall, this study offers an explanation for the previously mixed findings on the effect of the dispersion of review ratings by focusing on the notion of preference heterogeneity, which underlies the difference between hedonic and utilitarian products.

KEY WORDS AND PHRASES:

• Consumer decision making
• consumer preference heterogeneity
• decision-making uncertainty
• dispersion of reviews
• hedonic products
• information diagnosticity
• online reviews
• utilitarian products

The authors thank The Institute of Management Research, Seoul National University, for financial support for this research.

Notes

1. One missing value was imputed by the EM (expectation-maximization) algorithm run over the entire data set, instead of being removed using casewise deletion.

2. One missing value was imputed by the EM algorithm run over the entire data set, instead of being removed using casewise deletion, as in Experiment 1.

Additional information

Notes on contributors

Wujin Chu

WUJIN CHU ([email protected]) is a professor of marketing at Seoul National University, Korea. His current interests are in brand attribution, online consumer behavior, and fairness in pricing. He has published in numerous journals, including Marketing Science, Journal of Marketing, Journal of Marketing Research, International Journal of Electronic Commerce, Journal of International Business Studies (JIBS), and Journal of Applied Social Psychology. In 2010, he was awarded the JIBS Decade Award by the Academy of International Business, which is given to the most influential paper published in JIBS, ten years after its publication.

Minjung Roh

MINJUNG ROH ([email protected]) is a Ph.D. candidate in the Graduate School of Business at Seoul National University. Her research focuses on the characteristics of electronic word of mouth, consumers’ responses to the dispersion of review ratings, and the roles of information sources and value motives in blog marketing. She has published in South Korean marketing journals.

Kiwan Park

KIWAN PARK ([email protected], corresponding author) is an associate professor of marketing at Seoul National University. With expertise in psychology, his current research addresses such topics in consumer behavior as ambivalence, emotion, embodied cognition, priming, metacognition, use of money, and others. He has published in Journal of Consumer Research, Journal of Consumer Psychology, and Journal of Business Ethics, among others.