The impact of aggregate ratings and individual reviews on consumer decision-making: A construal level theory perspective

Abstract

In certain cases, despite a product's high overall rating, a single negative review has the potential to undermine and alter a consumer's otherwise favorable decision. Conversely, a single positive review can prompt consumers to adopt a positive attitude towards a product or service, even if the product has a low aggregate rating. This phenomenon illustrates a type of cognitive bias known as base-rate neglect, in which consumers in an online review setting may disregard average product ratings in favor of individual reviews. When faced with conflicting cues, consumers attempt to infer which cue types are more diagnostic for their decisions. To this end, the present thesis examines how consumers use aggregate review metrics (ARM) (e.g., average product ratings) and individual reviews (IR) (e.g., a single review text) to estimate the risk likelihood of and make an evaluation of a product. Drawing on construal level theory (CLT) as a theoretical foundation, the study posits that psychologically distant objects are represented as abstract categories, while psychologically close objects are represented as concrete and contextual. In this framework, conceptualizing eWOM as a communication model in light of numerous contextual factors, the thesis addresses cue types as part of a broader inquiry into the influence of base-rate information (abstract, aggregated, and category-level characteristics within a population) and case information (concrete, individuating, and case-specific instances) on risk assessment and product evaluation. By unpacking base-rate neglect in the eWOM context, this study aims to highlight mental construal as a novel moderator that determines the prominence of specific cues under certain conditions. Additionally, it identifies consumers' risk estimation as an underlying mechanism in the pathway of behavioral outcomes and also a crucial boundary condition, demonstrating that nudging base-rate cues by providing a simple reminder of the base-rate fallacy can significantly eliminate this bias in consumer decision-making. This thesis consists of eight studies, including six experiments, a survey, and a qualitative study, all of which utilize various stimuli, measures of evaluation (such as persuasion, self-report intention to adopt cue types, willingness to pay, real choice, and behavioral intention), and methods (including a survey, in-depth interviews, lab, and online experiments), as well as diverse sample populations (such as students and frequent online shoppers with different demographic characteristics), and cultural context (with the participation of individuals from the US and Turkey). Throughout the thesis, all experimental studies are designed with the presence of conflicting cues (individual favored cue [AFC] vs. aggregate favored cue [IFC]).