Exploring Latent Characteristics of Fake Reviews and Their Intermediary Role in Persuading Buying Decisions

Abstract

Online reviews play a significant role in shaping consumer purchase decisions. Accordingly, emergence of fake reviews has proliferated as an instrument to manipulate customers’ buying preferences. Such manifestation, however, lacks theoretical grounding and remains under researched due to two notable challenges: first, absence of conceptual underpinnings between consumers’ writing style and recommendation behavior. Second, little knowledge about the role of product characteristics underlying fake reviews and their influence on nudging product preferences. Through the lens of environmental psychology, this study uses an empirical investigation utilizing natural language processing (NLP) to uncover latent product-specific features underlying customer reviews and their impact on persuading buying preferences. As a major finding, we observe that characteristics underlying fake reviews, as opposed to genuine ones, fail to influence product recommendation or discouragement. Accordingly, we suggest firms permitting fake reviews on their portals to be aware of the limited economic advantages of such practices.