Three essays on information transparency strategies of online digital platforms and their implications

Abstract

In the second essay of my dissertation, information transparency is contextualized as providing visual cues about products in reviews. Some review platforms have recently proposed providing photos directly in-line with review text in reviews to better convey product information. Drawing from media synchronicity theory and expectation-confirmation theory, this study investigates whether and how providing visual cues about products in reviews affects review helpfulness and product ratings. The identification strategy is a natural experiment on Yelp.com in June 2013 in which the platform shifted from separate to integrated images in reviews. We examined 68,382 reviews of the same set of restaurants from Yelp and TripAdvisor and used a difference-in-differences approach to identify the causal effect. The results suggest providing visual cues in reviews leads to a reduction review helpfulness of extreme reviews. The results also suggest that providing visual cues through pictures in reviews improves consumers’ product understanding and as a result improves the rating for selected products, especially when rating variance of a product is high.