Informing Decisions: How People use Online Rating Information to Make Choices

In this paper we investigate how people use online rating information to inform decision making. We examine whether a theory of searching for information to discriminate between alternative choices can explain behavior, and we contrast it to the normative theory. Partly in accord with the theory, findings from a controlled experiment suggest that in an environment dominated by positive reviews, such as the World-Wide Web, people gather more information for the best alternative under consideration, and they take more time to inspect reviews of lower rating. We discuss the theoretical and experimental implications, and propose a bounded optimal account of the way in which people acquire information in service of decision making.