The value of rating diversity within multidimensional rating system: Evidence from hotel booking platform

Abstract

An increasing number of hotel booking platforms and review websites deploy multidimensional rating systems to encourage users to provide additional evaluations of a product/service besides the overall rating. However, providing the itemized ratings of a product/service requires extra effort which makes users tend to post identical ratings (default setting). According to the information transfer theory, we postulate that rating diversity enhances review usefulness within the multidimensional rating system and; based on the loss aversion phenomenon, we also posit that the positive effect of rating diversity on review usefulness should be greater among negative reviews. Using a sample of 1,720,429 hotel reviews, this study reveals that while rating diversity enhances review usefulness, its effect varies across the valence of each review; specifically, the positive effect of rating diversity mainly functions among negative reviews. These findings yield direct implications for hotel booking platforms or review websites that deploy multidimensional rating systems. • Theories of information transfer and loss aversion are applied in developing the research hypotheses. • 1,720,429 hotel reviews collected from a leading hotel booking platform are used to conduct the empirical analysis. • Rating diversity enhances review usefulness, but this positive effect mainly functions among negative reviews. • Practical implications for platform operators and hotel managers are presented.