How Does the Power of Crowdvoting Affect Purchase Decisions? Effects of Majority and Minority Influence in Online Rating Systems

Abstract

Online rating systems gather review scores on products from different customers’, creating collective opinions and accumulating the power formed by the crowdvoting. Such the power of the crowdvoting generates two influences: majority and minority influences. Both of which may form a signal that guides or misleads product/service evaluation and in turn purchase decision. This study draws from signaling theory to examine the effects of (1) majority, (2) minority influence and (3) number of reviewers on online shoppers’ perceived product quality and perceived social risk and how they further influence purchase intention. We conducted a scenario-based experiment to test the research model and employed a 2x2x2 full factorial design. A total of 371 undergraduates had participated. The results of this study suggest that majority influence increases perceived product quality and decreases perceived social risk, influencing shoppers’ purchase decision. Implications for theory, practice, and future research directions are discussed.