Online Herding Behavior and the Effect of Positive versus Negative Reviews on Consumer Choice

Consumers use reviews in their decision making process to get an indication whether or not to buy a product. This type of herding behavior, where decisions depend upon choices made by others, is examined whereby this research answers the question how the ratio of positive versus negative reviews affect consumers’ purchase intention. Quantitative online research with multiple treatment groups shows that consumers’ likelihood to buy a product is positively and negatively influenced when the cluster of reviews is, on the whole, either positive or negative, respectively. In these two situations, herding behavior is observed. No significant effect on intentional buying behavior has been found in situations of an equal number of positive and negative reviews. Lastly, this study finds no difference in consumers’ purchase intention between displaying positive reviews with or without profile information of the review writer. Results imply that webshops don’t have to take the most serious account as soon as a negative review is posted. Additionally, webshops are not in need to display personal information from their reviewers.