The Digitization of Word-of-mouth: Promise and Challenges of Online Feedback Mechanisms

Online feedback mechanisms harness the bi-directional communication capabilities of the Internet in order to engineer large-scale word-of-mouth networks. Best known so far as a technology for building trust and fostering cooperation in online marketplaces, such as eBay, these mechanisms are poised to have a much wider impact on organizations. Their growing popularity has potentially important implications for a wide range of management activities, such as brand building, customer acquisition and retention, product development, and quality assurance. This paper surveys our progress in understanding the new possibilities and challenges that these mechanisms represent. It discusses some important dimensions in which Internet-based feedback mechanisms differ from traditional word-of-mouth networks and surveys the most important issues related to their design, evaluation, and use. It provides an overview of relevant work in game theory and economics on the topic of reputation. It discusses how this body of work is being extended and combined with insights from computer science, management science, sociology, and psychology in order to take into consideration the special properties of online environments. Finally, it identifies opportunities that this new area presents for OR/MS resea

Flying to Quality: Cultural Influences on Online Reviews

Customers increasingly consult opinions expressed online before making their final decisions. However, inherent factors such as culture may moderate the criteria and the weights individuals use to form their expectations and evaluations. Therefore, not all opinions expressed online match customers’ personal preferences, neither can firms use this information to deduce general conclusions. Our study explores this issue in the context of airline services using Hofstede’s framework as a theoretical anchor. We gauge the effect of each dimension as well as that of cultural distance between the passenger and the airline on the overall satisfaction with the flight as well as specific service factors. Using topic modeling, we also capture the effect of culture on review text and identify factors that are not captured by conventional rating scales. Our results provide significant insights for airline managers about service factors that affect more passengers from specific cultures leading to higher satisfaction/dissatisfaction