Impacts of Online Diaries on Sales of Credence Goods: Evidence from a Cosmetic Surgery Platform

Hongfei Li, Gang Wang, Jing Peng, Xue Bai
Image credit: The George R. Brown Convention Center

Abstract

Credence goods are defined as products whose quality is difficult to evaluate. While online reviews have found to be effective in driving sales of search and experience goods, little is known about its effectiveness on credence goods. Using data from a cosmetic surgery platform, we investigate the impact of a novel form of online reviews, i.e. diaries, on the sales of credence goods. We also examine how the effects are moderated by the risk of surgeries. We focus on two diary features: number of images and post duration. We find the number of images has a positive impact on sales and the effects are stronger for more risky surgeries. These findings shed some light on the online marketing of credence goods.

Date
Oct 24, 2017 10:30 AM
Event
INFORMS Annual Meeting 2017
Location
The George R. Brown Convention Center and Hilton Americas-Houston Hotel
1001 Avenida de las Americas, Houston, Texas, 77010, United States
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Hongfei Li
Assistant Professor

Hongfei Li is an assistant professor from the Department of Decision Sciences and Managerial Economics (DSME) of School of Business, at the Chinese University of Hong Kong. His current research focuses on business analytics in emerging online platforms, applications of artificial intelligence and machine Learning, and statistical methodology.