Booking now or later: Do online peer reviews matter?

Abstract

Consumers always face a tradeoff between making a purchase decision now and continuing information searching with delayed purchase decision. This study extends extant literature by empirically investigating the effects of online peer reviews on consumers' timing of booking a restaurant using a merged data set of online peer reviews and consumer reservation records. The results show that the rating valence, rating variation, and review content richness of online peer reviews positively motivate potential consumers to book a restaurant earlier, while the time interval between successive reviews hinders consumers' booking decision. It is also found that the effects of rating valence on timing of restaurant booking depend on the different levels of rating variation and review content richness. The findings of this study help practitioners better understand consumers' purchase decision process and improve marketing strategies.