The Role of Online Ratings and Reviews in Consumer

Decision-Making: Insights from Behavioral Economic Perspectives

Chenxi Zhang

ESCP Business School, Paris, 75000, France

Keywords: Online Ratings and Reviews, Consumer Decision-Making, Consumer Behaviors.

Abstract: With the rapid development of the Internet and e-commerce platforms, online ratings and reviews have

become an important reference point for consumer decision-making, revolutionizing the traditional methods

adopted by consumers. They reduce information asymmetry, encourage trusting consumer buying behavior,

and help the consumers to make more informed purchasing decisions-especially in the retail, food, and travel

sectors. This paper is an in-depth literature review that assesses current writings on online ratings and reviews

shaping and influencing trends in customer behavior. After assessing their quality, quantity, and consistency,

the paper recognizes their emotional and social power, as well as the potency of negative feedback; in addition,

there is a dynamic interaction between these ratings and extensive detailed reviews. In addition, this paper

this paper suggests that businesses should encourage the writing of bottom-up, detailed, and real reviews.

They should also ensure positive and transparent feedback to negative feedback so that the brand's credibility

and consumer loyalty will be improved. As for consumers, critical thinking should be maintained when using

online reviews and comparative understanding from multiple sources should be brought in. Consumers should

be aware of polarized reviews and check the relevance and reliability of reviews based on their needs and

reality.

1 INTRODUCTION

1.1 Background

In the current era of rapid Internet development, the

Internet community possesses a vast potential for the

economic market. Consequently, a multitude of e-

commerce platforms are emerging, thereby

increasing consumers' propensity to engage in online

shopping.

Online consumption, when the real item is not

visible, is frequently a consideration that consumers

consider when making selections, following a

sequence of mental selection activities prior to

making their final choice, in contrast to offline

consumption. The product's reputation is one of the

most crucial purchasing reference elements, and

online reviews are the primary source of online

reputation. Compared with merchants ’ graphic

introductions, online reviews posted by consumers

who have purchased products can reflect more

authentic and comprehensive information (Chevalier

& Mayzlin, 2006), assisting potential consumers in

mitigating risks and promoting consumption

decisions. These product opinions, as a new form of

electronic word-of-mouth/mouse (EOM), have

become an indispensable tool for consumers, who

increasingly rely on the reviews of other consumers

to make online purchasing decisions (Ludwig et al.,

2013), and therefore for retailers looking to attract

and retain consumers (Pan & Zhang, 2011).

1.2 Significance of the Research

Online ratings and reviews represent one of the major

means of information dissemination in the digital

economy, while having a considerable impact on

consumer behavior and market efficiency. Online

reviews improve consumers in perceiving the

qualities of goods and services due to reduced

information asymmetry. This mechanism is

particularly critical in high-information-demand

domains such as retail, food, and travel. For example,

consumers are unable to fully understand the quality

of products through prior assessments when

purchasing experiential goods, while online reviews

act as a substitute signal that significantly reduces

decision uncertainty. In addition, the dynamic

feedback mechanism of online reviews provides

754

Zhang, C.

The Role of Online Ratings and Reviews in Consumer Decision-Making: Insights from Behavioral Economic Perspectives.

DOI: 10.5220/0014280000004942

Paper published under CC license (CC BY-NC-ND 4.0)

In Proceedings of the 2nd International Conference on Applied Psychology and Marketing Management (APMM 2025), pages 754-759

ISBN: 978-989-758-791-7

firms with real information about consumer

preferences and helps them adjust their strategies to

meet market demand. However, the actual

effectiveness of this mechanism is constrained by

various factors such as the credibility of the reviews,

information overload, and emotional bias, which

provides a wide scope for related research.

2 OVERVIEW OF ONLINE

RATINGS AND REVIEWS

2.1 Definition and Type

Online ratings and reviews are a form of user

evaluation of a product, service, or experience that

not only acts as an information source but also

provides decision-making support for potential

buyers and feedback to businesses. These two types

of evaluations can be further classified into:

quantitative ratings and textual reviews.

Numeric ratings are usually presented in an

intuitive manner, such as five stars, ten point system,

percentage score, and are a quick assessment of a

user's overall satisfaction with a product or service.

This simplified presentation facilitates quick access

to overall rating information for the user, but may

therefore obscure the specific views and

informational details of the evaluator, thus limiting its

usefulness in conveying in-depth information.

Textual reviews are detailed assessments

provided by users in written, graphic, or audiovisual

forms. These can convey much more emotional

expression, provide more detailed information, and

supply specific details, thus overcoming the

limitations of the brevity of e-ratings (Pan & Zhang,

2011). For example, textual reviews may include user

descriptions of specific product features, emotions

about the purchasing and consumption experiences,

and recommendations or criticisms. Both corporate

performance improvement tactics and user decision-

making processes greatly benefit from the availability

of comprehensive information. In addition, text-

based analysis is specifically affected by linguistic

characteristics, personal preferences, and context

factors, thus showing high variability (Ludwig et al.,

2013). The emotional color of the language (e.g.,

positive, negative, neutral) may directly affect the

user's willingness to buy. For example, positive

emotions are more likely to promote consumption,

while negative emotions may lead to hesitation or

abandonment. At the same time, words that match

users' language habits or preferences, or that have a

high degree of similarity and resonance, are more

likely to stimulate immediate consumption behavior.

2.2 Key Platforms and Channels for

Online Ratings and Reviews

The dissemination of and access to online ratings and

reviews exists primarily on a diverse range of

platforms and channels that have played a key role in

the development of user-generated content (UGC)

(O’Connor, 2010). Platforms provide an important

channel for consumers to express their opinions and

obtain information, as well as a key tool for

merchants to understand user needs and feedback. It

has been demonstrated that having user ratings on a

website enhances users' opinions of its usability and

social presence (Kumar & Benbasat, 2006). Below

are some common platforms and their comment

characteristics:

2.2.1 Amazon

As a leading e-commerce platform internationally,

Amazon's system for user reviews has attracted

significant scholarly interest and is seen as a model

within the industry (Mudambi & Schuff, 2010). In

addition to thorough written evaluations, this review

system includes star ratings and a voting element

called "Helpful Reviews" that highlights

contributions of the highest caliber. Amazon also lets

customers post videos and pictures, which is a

multimedia format that makes reviews more reliable

and educational. Research has shown that Amazon

reviews influence individual consumer decisions, and

also that Amazon drives sales by aggregating review

data (Chevalier & Mayzlin, 2006).

2.2.2 Taobao

Taobao, one of China's biggest e-commerce sites,

combines text-based evaluations with digital ratings

to give customers thorough information about

products and services. Consumers can rate on a five-

point scale in terms of the accuracy of product

descriptions, the seller's service attitude, the

timeliness of logistics, and other dimensions, and

assess satisfaction from multiple perspectives

separately. Customers may simultaneously utilize

text, images, and even videos to provide detailed

descriptions of their purchase and usage experience.

These evaluations serve as a reliable resource for

prospective buyers in addition to assisting other users

in understanding the product's particular

performance. After the initial assessment, customers

The Role of Online Ratings and Reviews in Consumer Decision-Making: Insights from Behavioral Economic Perspectives

755

may submit "follow-up reviews" on Taobao to

provide input on the product's long-term use. This

function is especially useful for evaluating durable

items or services.

2.2.3 TripAdvisor

TripAdvisor is an important reference platform for

travelers around the world, focusing on reviews of

travel-related services. It provides star ratings and

detailed text reviews of hotels, restaurants,

attractions, etc. (Gretzel, et al., 2007). TripAdvisor's

Travelers' Choice ratings integrate user reviews and

data to provide authoritative reference information

for potential consumers. TripAdvisor's Travelers'

Choice ratings integrate user review data to provide

authoritative reference information for potential

consumers. In addition, the platform allows users to

upload pictures to show the travel experience from

multiple perspectives, which enhances the

authenticity and persuasiveness of the reviews.

2.2.4 Social Media Platforms

Social media (e.g., Facebook, Instagram, Twitter) are

emerging as another important channel for consumers

to express their opinions. Reviews on these platforms

come in various forms, including text, pictures,

videos, etc. The content spreads quickly and covers a

wide range of areas, and at the same time, it may

contain promotional information and false

information, and these reviews can easily affect brand

image and sales.

2.3 Popularity and Influence of Online

Shopping

In the contemporary era of accelerated Internet

development, the Internet community harbors

immense potential for the economic market.

Consequently, a multitude of e-commerce platforms

are emerging, thereby increasing consumers'

propensity to engage in online shopping.

Online consumption, characterized by the absence

of the tangible product, frequently involves a series of

cognitive selection processes preceding the

consumer's final decision, in contrast to offline

consumption. Product reputation is one of the most

important factors affecting people's purchasing

decisions, while online reviews are the primary

source of information about the reputation of a

product. It has been argued that online reviews are

more authentic and comprehensive in disseminating

information about a product than any graphic

introduction by the merchant (Chevalier & Mayzlin,

2006; Floyd et al., 2014)). These reviews are really

important to potential consumers in risk mitigation

and further consumption decision-making.

3 THE IMPACT OF ONLINE

RATINGS AND REVIEWS ON

CONSUMERS

3.1 Role in Decision-Making Process

In situations where consumers are bombarded with

too much information regarding a product or service,

they often find it hard to make a choice due to the

numerous options available. Online ratings are direct

and comprehensive measures that can help consumers

narrow down their choices by giving them an instant

overview of a product's overall quality (Chevalier &

Mayzlin, 2006). Online reviews and ratings play a

critical role in several steps of the consumer decision-

making process, especially for experiential products

and services, as well as for unfamiliar products. The

number of reviews and ratings and the quality of the

content in such reviews can significantly influence

the choices of consumers in their choice processes. A

high rating in a continuous manner can build trust

among consumers for a product. At the same time,

detailed textual comments could help consumers

understand how a product works and how it is to be

used in more depth, offering information that is not

conveyed through numerical ratings . In Mudambi

and Schuff's study, they used 1,608 online reviews on

Amazon.com since September 2006, with products

mainly in the search category and experiential

products, in order to explore what factors influence

the usefulness of reviews (Chevalier & Mayzlin,

2006). The Helpful Votes/Total Votes of the reviews

were used as the dependent variable to measure the

extent to which the reviews helped consumers in their

decision making. The major independent variables

were review depth, measured as the number of words

in each review; rating extremity, according to the

stars rating of the reviews—hence, especially focused

on extreme ratings of 1 and 5 stars—and product

type—searchable or experiential.The effects of the

above factors on the usefulness of reviews were

investigated through multiple linear regression

analyses, and interaction terms were introduced to

test the moderating effect of product type on these

relationships. The results showed that the more

detailed the review, the more useful it was; that rating

extremity negatively affected the usefulness of

APMM 2025 - International Conference on Applied Psychology and Marketing Management

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search-based products but not experience-based

products; and that product type moderated the effect

of review usefulness.

3.2 Emotional and Social Impact

The influence of online ratings and reviews goes

beyond just influencing the rational decision-making

processes of consumers; they also have emotional and

social impacts. First, as reviews have the power to

significantly impact customers' perceptions and

subsequent decision-making behaviors, it is crucial

that they have emotional content and expression,

particularly when such evaluations evoke either

positive or negative feelings. Reviews with high

emotional content can evoke strong empathy, thus

increasing their persuasiveness and credibility. This

is especially true when consumers do not have

enough time or interest to analyze them in depth.

On a social level, online reviews have significant

social impact as a form of user-generated content. The

existence of reviews informs consumers, and by

conveying the usage experiences of others,

consumers can feel some form of social support

(Chevalier & Mayzlin, 2006). In addition, consumers

also tend to follow group preferences or trends, and

the herd effect can lead to a tendency to follow the

majority opinion when faced with a large number of

consistent reviews.

However, emotional and social influences can

also introduce bias. For example, extreme reviews

(e.g., over-exaggerated positive or negative

comments) can be misleading to consumers,

especially if they are unable to verify the source of the

information, and they tend to repeat previous

comments and ignore their true feelings. Exaggerated

reviews inflate both the benefits and the drawbacks of

a product or service, thus distorting consumers'

objective judgment and causing them to make biased

decisions. For instance, overly positive reviews may

lead consumers to buy products that are inappropriate

for them. On the other hand, very negative reviews

may prevent consumers from considering better

alternatives. Moreover, individuals influenced by

such extreme reviews are probably going to repeat or

mimic others' opinions without thinking about their

own real experiences. Such a phenomenon not only

decreases the variety of user-generated content but

also amplifies the influence of extreme reviews.

3.3 The Impact of Negative Reviews

and Relative Response Measures

Consumer decisions and brand perceptions are

greatly influenced by negative evaluations, which can

have a greater and more enduring effect than

favorable reviews. Because negative feedback is

frequently regarded as the earliest indication of a

possible risk, people are more sensitive to it than to

good information (Baumeister et al., 2001).

Consumers trust negative reviews in the online

environment, which they find more truthful and

credible, especially when it has specific facts or

personal experience (Lee & Youn, 2009). The trust

may influence consumers' purchase intentions further

and even change the general impression of the brand.

The approach that a company takes in its response

is very important when dealing with negative

reviews. For example, publicly acknowledging the

problem, explaining it in detail, or offering a solution

not only eases the concern of the dissatisfied

consumer but also tells other potential customers that

the brand is accountable and shows respect for

customer experience. The constructive and specific

responses are more likely to create consumer trust and

turn negative experiences into positive memories,

which benefits the relationship duration between

consumers and brands (Weitzl & Hutzinger, 2017).

On the other hand, if a brand evades responsibility or

gives a formalized and impersonal response, it may

further outrage the consumers; besides, inappropriate

or careless handling of feedback may hurt the

reputation of the brand.

4 THE IMPACT OF ONLINE

RATINGS AND REVIEWS ON

CONSUMERS

4.1 Number of Reviews

The number of reviews plays a key role in building

consumer trust and increasing purchase intent as an

important reference metric for consumer decision-

making. A large number of reviews are often

interpreted by consumers as a sign of high usage or

discussion. When the number of reviews for a product

or service is high, consumers tend to believe that the

product has received a lot of attention and is a “hot

product”, thus increasing their confidence in its

trustworthiness and quality, or generating curiosity to

spend money on it. For example, given a choice

between two products that have similar ratings, the

The Role of Online Ratings and Reviews in Consumer Decision-Making: Insights from Behavioral Economic Perspectives

757

product with more reviews is often chosen because of

a signal it sends for being trustworthy and safe.

However, the review count effect is not linear; it has

been shown in many studies that the incremental

benefit of increasing the quantity of reviews

decreases once past a certain point. For example, in

the study of Dellarocas et al., the number of reviews

of different products on e-commerce platforms and

their relationship with sales were collected to explore

how the number of reviews affects consumers' trust

and purchase intention (Dellarocas et al., 2007). The

strength of the association between the number of

reviews and consumers' purchase intention is also

compared through statistical analysis to verify

whether the incremental benefit of the number of

reviews begins to diminish after reaching a certain

threshold. However, the number of reviews alone

may not be enough to make a correct judgment of the

product, especially when the reviews are many but

repetitive or irrelevant, or when the product is being

pushed by a seller or advertisers. In such

circumstances, misleading or distracting reviews

might be of little help in the consumer's decision-

making and may even create confusion.

4.2 Quality of Reviews

Review quality usually has a more direct impact on

consumer purchase intent than review quantity. High-

quality reviews usually contain specific details,

product images, and real-world experiences that help

consumers judge whether the product really

corresponds to the sales description and whether it

will satisfy their actual needs. For example, in the

case of high-risk or experiential products, detailed

reviews can provide specialized information that

consumers need in order to reduce uncertainty and

gain trust. Moreover, the effectiveness of reviews

depends on the language used because in high-quality

reviews, the emotions and information are conveyed

much better and hence offer a significant influence on

the consumers.

4.3 Matching Between Ratings and

Reviews

The alignment of ratings, with written reviews can

greatly influence how consumers perceive and decide

about products according to research findings.

Showing that when ratings and review content aligns

well together it tends to result in reliable product

assessments by consumers as opposed to when theres

a discrepancy, between the two which could cause

confusion or uncertainty. Consumers may lose trust

in ratings if they are high. The reviews lack depth or

are too simple. On the hand they might still decide to

buy a product with ratings if the reviews are detailed

and convincing (Ludwig et al., 2013). Therefore

consumers tend to use both ratings and reviews

together to get a picture before making a decision.

Examples include two studies by Nazlan, Nadia &

Tanford, Sarah & Montgomery, Rhonda. (2018). The

first study used a 2×3 experimental design to assess

the impact of review order (positive or negative

preference) and review type (text + ratings, text,

ratings) on consumer decision-making with a sample

of 210 diverse adult respondents. The results obtained

are that the order of positive and negative reviews

first does not significantly affect the restaurant's

evaluation and recommendation intention. Reviews

that included verbal descriptions and ratings had a

greater impact on restaurant evaluation and

recommendation intentions than reviews that used

either verbal descriptions or ratings alone. The impact

of negative reviews on consumer decisions is stronger

than that of positive reviews, and the impact of

negative reviews goes beyond the impact of review

order. The limitations of this study are that the sample

is predominantly middle-aged, which does not reflect

the behavioral characteristics of consumers of all

ages; the simulation scenario used in this study may

lack the complexity of the actual online review

environment, which does not adequately reflect

consumers' real decision-making behaviors; and the

number of reviews is insufficient, and no significant

impact was observed. It is recommended to enhance

the realism of the experimental scenario, expand the

age distribution of the sample, and optimize the

design of the review sequence to make it closer to the

actual situation. The second study used a 2×2×2

experimental design to analyze the effects of rating

format (numeric vs. star ratings), the presence or

absence of pictures, and review sentiment (positive

vs. negative) on consumer choices, with a sample of

260 U.S. college students. The results show that when

the review is positive, the review with a picture

increases the probability of selecting the target menu

item more than the review without a picture.

However, in the negative reviews, pictures did not

significantly affect the choice. In terms of rating

format, the combination of the numerical rating and

the picture situation improved the probability of

selecting the target menu item, while the star rating

had no significant effect. This study had a limited

sample of college students, which is unlikely to be

representative of any broad constituency of

consumers. While photographs prove to be more

effective in positive reviews, it is not clear why they

APMM 2025 - International Conference on Applied Psychology and Marketing Management

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do not work in negative reviews. The menu and

review scenarios modeled here are far less complex

compared to any real online shopping scenario. It is

recommended that future research expand the sample

to include subjects from different age groups and

occupational backgrounds and develop more

sophisticated experimental scenarios to make

findings relevant. Generality of the findings can also

be established by replication in other domains of

consumer activities, such as online shopping, travel

choices, or technology product evaluation.

5 CONCLUSION

5.1 Summary

The research once again underpins that online ratings

and reviews have become a factor of vital

significance for the processes of making a choice by

consumers and market dynamics in general. Among

the key findings, the findings indicate that review

volume is critical to establish consumer confidence,

quality reviews decrease the uncertainty of a choice,

and inconformity between numerical ratings and

written commentary shapes consumer perceptions.

Moreover, the emotional and social character of

reviews-one may especially mention the greater

power of negative feedback-testify to the complex

interrelationship between consumer psychology and

online feedback systems.

5.2 Recommendations

Managing and engaging with customer reviews can

boost trust and loyalty, for businesses. Integrating

understanding replies to feedback can transform

unhappy clients into loyal supporters and demonstrate

responsibility to prospective consumers. Firms

should also prioritize encouraging genuine reviews to

elevate their usefulness and reliability.

As customers go through reviews it is important

for them to be discerning and thoughtful, in their

assessments of the feedback they come across on the

internet platforms. This involves being aware of any

prejudices, in negative reviews and making sure to

check with different sources before forming a final

opinion. Additionally, it is crucial to consider both the

ratings and the detailed descriptions provided in order

to get a rounded view of a product or service.

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