The Effect of the Dispersion of Review Ratings on Evaluations of Hedonic Versus Utilitarian Products

Using the information-diagnosticity framework, this study demonstrates that when exposed to highly versus lowly dispersed ratings, consumers evaluate hedonic products more positively than they do utilitarian products. Three experiments offer evidence to support this prediction, by comparing music files and car navigation devices (Experiment 1), fiction books and driver's license test preparation books (Experiment 2), and two smartphone apps, a comic book and a voice translator (Experiment 3). Compared to lowly dispersed ratings, highly dispersed ratings improve the evaluation of hedonic products by reducing the perceived uncertainty of how accurately one can predict decision outcomes in terms of achieving the decision goals. The proposed effect also emerges as more pronounced when the average ratings are high rather than low. This observation adds refinements to existing reference-dependent models by showing that the pursuit of hedonic goals reverses general preferences for low over high dispersions of ratings at high average levels. Overall, this study offers an explanation for the previously mixed findings on the effect of the dispersion of review ratings by focusing on the notion of preference heterogeneity, which underlies the difference between hedonic and utilitarian products.