Price Promotions and Trade Deals with Multiproduct Retailers
Management Science
Frictionless Commerce? A Comparison of Internet and Conventional Retailers
Management Science
Information Systems Research
Using Online Conversations to Study Word-of-Mouth Communication
Marketing Science
Promotional Chat on the Internet
Marketing Science
Beyond the Hype of Frictionless Markets: Evidence of Heterogeneity in Price Rigidity on the Internet
Journal of Management Information Systems
When Online Reviews Meet Hyperdifferentiation: A Study of the Craft Beer Industry
Journal of Management Information Systems
Do online reviews affect product sales? The role of reviewer characteristics and temporal effects
Information Technology and Management
Deriving the Pricing Power of Product Features by Mining Consumer Reviews
Management Science
IEEE Transactions on Knowledge and Data Engineering
Product Reviews and Competition in Markets for Repeat Purchase Products
Journal of Management Information Systems
Text mining and probabilistic language modeling for online review spam detection
ACM Transactions on Management Information Systems (TMIS)
Deciphering word-of-mouth in social media: Text-based metrics of consumer reviews
ACM Transactions on Management Information Systems (TMIS)
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By using online retail data collected from Amazon, Barnes & Nobel, and Pricegrabber, this paper investigates whether online vendors’ pricing decisions fully reflect the information contained in various components of customers’ online reviews. The findings suggest that there is inefficiency in vendors’ pricing decisions. Specifically, vendors do not appear to fully understand the incremental predictive power of online reviews in forecasting future sales when they adjust their prices. However, they do understand demand persistence. Interestingly, vendors reduce price if the actual demand is higher than the expected demand (positive demand shock). This phenomenon is attributed to the advertising effect suggested in previous literature and the intense competitiveness of e-Commerce. Finally, we document that vendors do not change their prices directly in response to online reviews; their response to online reviews is through forecasting consumer’s future demand.