The Internet has fundamentally changed the way that buyers and sellers meet and interact in the marketplace. Online retailers make it cheap and easy to browse, comparison shop and make purchases with the click of a mouse. The Web can also, in theory, make for better-informed purchases — both online and off — thanks to sites that offer crowdsourced reviews of everything from dog walkers to dentists.
In a Web-enabled world, it should be harder for careless or unscrupulous businesses to exploit consumers. Yet recent studies suggest that online reviewing is hardly a perfect consumer defense system. Researchers at Yale, Dartmouth and University of Southern California have found evidence that hotel owners post fake reviews to boost their ratings on the site — and might even be posting negative reviews of nearby competitors.
The preponderance of online reviews speaks to their basic weakness: Because it's essentially free to post a review, it's all too easy to dash off thoughtless praise or criticism, or, worse, to construct deliberately misleading reviews without facing any consequences.
It's what economists (and others) refer to as the cheap-talk problem. The obvious solution is to make it more costly to post a review, but that eliminates one of the main virtues of crowdsourcing: There is much more wisdom in a crowd of millions than in select opinions of a few dozen.
Of course, that wisdom depends on reviewers giving honest feedback. A few well-publicized incidents suggest that's not always the case. For example, when Amazon's Canadian site accidentally revealed the identities of anonymous book reviewers in 2004, it became apparent that many reviews came from publishers and from the authors themselves.
Technological idealists, perhaps not surprisingly, see a solution to this problem in cutting-edge computer science. One widely reported study last year showed that a text-analysis algorithm proved remarkably adept at detecting made-up reviews. The researchers instructed freelance writers to put themselves in the role of a hotel marketer who has been tasked by his boss with writing a fake customer review that is flattering to the hotel. They also compiled a set of comparison TripAdvisor reviews that the study's authors felt were likely to be genuine.