Elena Grewal’s research while affiliated with Yale-New Haven Hospital and other places

Reputation systems are used by nearly every digital marketplace, but designs vary and the effects of these designs are not well understood. We use a large-scale experiment on Airbnb to study the causal effects of one particular design choice—the timing with which feedback by one user about another is revealed on the platform. Feedback was hidden until both parties submitted a review in the treatment group and was revealed immediately after submission in the control group. The treatment stimulated more reviewing in total. This is due to users’ curiosity about what their counterparty wrote and/or the desire to have feedback visible to other users. We also show that the treatment reduced retaliation and reciprocation in feedback and led to lower ratings as a result. The effects of the policy on feedback did not translate into reduced adverse selection on the platform.

Reviews and other evaluations are used by consumers to decide what goods to buy and by firms to choose whom to trade with, hire, or promote. However, because potential reviewers are not compensated for submitting reviews and may have reasons to omit relevant information in their reviews, reviews may be biased. We use the setting of Airbnb to study the determinants of reviewing behavior, the extent to which reviews are biased, and whether changes in the design of reputation systems can reduce that bias. We find that reviews on Airbnb are generally informative and 97% of guests privately report having positive experiences. Using two field experiments intended to reduce bias, we show that non-reviewers tend to have worse experiences than reviewers and that strategic reviewing behavior occurred on the site, although the aggregate effect of the strategic behavior was relatively small. We use a quantitative exercise to show that the mechanisms for bias that we document decrease the rate of reviews with negative text and a non-recommendation by just .86 percentage points. Lastly, we discuss how online marketplaces can design more informative review systems.