The Impact of Review Dissimilarity and Volume on Economic Outcomes: An Empirical Investigation of Restaurant Reviews

While prior work has examined the impact of several review and reviewer characteristics, the impact of review dissimilarity on economic outcomes has not been studied, nor is it well understood. Consumers may value dissimilar reviews when making decisions, as such reviews help reduce uncertainty. The effect of review dissimilarity on consumer choices also depends on review volume, a readily observable heuristic cue that can also affect the uncertainty regarding a product or service. We used a dataset from Yelp that provides reviews and related information for restaurants to investigate whether review dissimilarity impacts a restaurant’s economic outcomes, as measured by check-ins. We further examined whether the influence of review dissimilarity on restaurant check-ins changes with review volume. We found that review dissimilarity in the aggregate positively impacts restaurant check-ins. This impact decreases with review volume, which serves as an easily observable heuristic cue to the reader. When accounting for positive and negative dissimilar reviews separately, we found that both review dissimilarities had a positive impact on check-ins when review volume was low. As review volume increased, this impact diminished for both dissimilarities. Further, the impact of negative review dissimilarity on check-ins became negative at high levels of review volume. Our findings have useful implications for review sites (platforms), businesses, and contributors (reviewers).