Title

Understanding the Impact of Negative and Positive Traveler Reviews: Social Influence and Price Anchoring Effects

Document Type

Article

Abstract

This research utilizes theories of social influence and price anchoring to provide insights into the psychological processes underlying travel purchases in the presence of online reviews. Two experiments were conducted in which subjects chose between two resorts for a Las Vegas vacation in a 2 × 3 experimental design that manipulated social influence (unanimous, non-unanimous reviews) and price (10%, 30%, and 50% higher or lower). Social influence was in the form of negative (experiment 1) or positive (experiment 2) traveler reviews. Perceptions of quality and value as well as discount to purchase/willingness to pay were measured. Results indicate that no amount of price reduction was sufficient to offset the impact of unanimously negative reviews, although an extreme price reduction influenced decisions when negative reviews were not unanimous. Price anchoring occurred for positive reviews, such that a higher reference price increased willingness to pay.