Empirical analysis reveals asymmetric price effects on online restaurant ratings, indicating that customer reviews act as fairness evaluations rather than neutral quality measures.
Online reviews shape restaurant reputation, yet how price perceptions influence ratings remains unclear. This study addresses this gap by integrating prospect theory with real-world pricing data from reviews of 2,000 New York restaurants. We operationalize reference dependence using consumer-reported prices versus platform-listed reference prices. Results reveal asymmetric effects: paying above the reference price reduces ratings more than equivalent savings increase them (loss aversion), and sensitivity declines as deviations grow (diminishing sensitivity). These patterns persist after controlling for meal type and service mode and attenuate among experienced reviewers, highlighting the role of expertise. Findings suggest that online ratings may act as fairness-sensitive evaluations rather than purely neutral indicators, offering implications for price transparency and expectation management in digital hospitality platforms.
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Nicolau et al. (2026) studied this question.
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