The Reliability of User Reviews

User generated reviews are one of the great innovations that came with the growth of the Internet. They are now pervasive, and cover everything from automobiles, to music,  books, movies, and restaurants. I suspect the arrival of user reviews on interactive mobile platforms (such as urbanspoon and amazon) will bring upon us a new wave of interest in such content.

Yet, user-generated reviews suffer from informational problems. Firstly, why would you trust the product recommendations from an online stranger any more than you might somebody else? Secondly, user reviews are often tediously long, contain huge volumes of inconsistent information, and sometimes even degenerate into personal mudslinging matches. This imposes search costs upon the person trying to make sense of reviews. For example I was recently searching for a new lens for my SLR camera (a little hobby on the side), and it took a bit more time than I had expected to visit various photography forums to sort out which products were really good, versus other lenses that suffered quality control problems. Thirdly, there is a growing phenomenon of companies manipulating online information for their own benefit. For instance, last week Seagate was found to be deleting user postings from their website about high defect rates, while a Belkin official was caught out offering cash for good reviews.

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