Status reinforcing: Unintended rating bias on online shopping platforms

Abstract

Online shopping platforms have gradually begun to use hierarchical loyalty programs to distinguish customers. Previous studies have focused mainly on the effect of such programs on loyalty and repurchase behavior, and little is known about how customer statuses in hierarchical loyalty programs affect their online product evaluations. Drawing on social status and social conformity theory, this study investigates the impact of customer status on the valence of online reviews. An instrumental variable is proposed to address the endogeneity issue. The results show that a customer's need for status leads to a negative rating bias when leaving online reviews. At the same time, people encounter social pressure from crowds. The need for social conformity can alleviate such rating bias. This study contributes to the understanding of the effect of social status on post-purchase behavior and provides practical implications for both managers and platforms.