Your Hometown Matters : Popularity-Difference Bias in Online Reputation Platforms

We study a new source of bias in online review platforms that originates from the popularity difference between the traveling reviewer's hometown and destination (popularity-difference bias). In particular, we model popularity-difference bias as a function of two opposing forces: (1) the travelers' evaluation of performance and (2) the travelers' expectations. The net result of these two forces leads to two competing views regarding the nature of popularity-difference bias: the first view is performance-dominant, while the second one is expectation-dominant. Through analyzing a large set of restaurant reviews from a major online reputation platform, we find empirical evidence in support of the performance-dominant view. Specifically, we find that popularity-difference bias affects both the assigned rating and the text-encoded sentiment of a review. When reviewers travel to a less popular location than their hometown, popularity-difference bias is negative. To the contrary, when reviewers travel to a more popular location than their hometown, popularity-difference bias is positive. Popularity-difference bias affects the average rating of restaurants up to 7%, while it alters the probability that an average customer will consider a restaurant by up to 16%. Awareness of the existence of popularity-difference bias allows managers to improve the design of their ranking systems: we show that such improvements can lead to up to 12% higher reviewer satisfaction, and up to 24% more diversified top-restaurant recommendations