Departamento de Economía

Abstract:Research based on surveys and lab experiments suggests that people's tendency to conform to the opinions of others is lower in more individualistic cultures. However, it is unclear how generalizable these findings are to real-world settings. This paper examines the effect of culture on social influence in the context of online consumer reviews. By exploiting discontinuities in the way Tripadvisor displays average ratings, I estimate how reviewers from different countries respond to the average opinion of past consumers. Reviewers from countries with less individualistic cultures tend to report ratings that are 0.1 stars higher when a restaurant's average rating increases discontinuously by 0.5 stars. This effect decreases with individualism and disappears for consumers from the most individualistic cultures. Importantly, this relationship is not driven by country-level correlates of individualism, such as income or education. Furthermore, cross-regional variation within Italy confirms that cultural values and social influence are also correlated across reviewers from different regions within the same country. These findings suggest that the cultural values of users affect the extent to which online reputation systems reveal the quality of products or firms being rated.