1.2SIAug 4, 2015
Information Cascades and Online Rating GamesOussama Fadil, Jake Soloff
Through mathematical analysis and simulations, online ratings and their impact on businesses are characterized through two parameters: an inherent and objective restaurant quality factor, and the accuracy of customers' gut feeling about a business. Within this model, it is found that online ratings are seldom accurate mainly because of the low or high accuracy in customers' gut feelings.