Examining the impact of consumer feedback on internet product evaluation: comparing base-rate and case history information

Abstract

Two important pieces of information for consumers evaluating products online are consumer ratings (i.e. base-rates) and consumer reviews (i.e. case histories). While literature in cognitive psychology shows a tendency to weigh case history information more heavily than base-rate information, other consumer oriented studies show the opposite. This study examined the relative impact of each type of information by treating consumer ratings and reviews as orthogonal factors and then manipulating the valence of each type of information. Participants evaluated a novel health beverage by viewing consumer ratings and/or reading their reviews about the product. Results indicated that the valence of the base-rate information significantly affected participants’ evaluation of the product only when case history information was not presented. When case history information was presented, the valence of such information significantly affected participants’ evaluation of the product regardless of the valence of any base-rate information. These results demonstrate that base-rate neglect may bias individuals’ evaluations of products since base-rate information tends to be more representative of a population than case history information. Thus determining ways of making base-rate information more impactful in consumer settings is an important goal.