Optional purchase verification in e-commerce platforms: More representative product ratings and higher quality reviews

E-commerce platforms struggle to create and maintain high-quality reputation systems. One promising option is "purchase verification," which confirms that the user reviewing a product purchased the product from the platform. Previous works comparing platforms that require purchase verification with platforms that do not offer purchase verification found that review manipulation is easier in the latter. But what happens in platforms where purchase verification is optional? In such platforms, there is no monetary cost for posting fake reviews. Yet, optional purchase verification (OPV) might introduce indirect costs for fake reviewers through expectation disconfirmation, hence positively affecting the reputation ecosystem of an e-commerce platform. To investigate, we use a quasi-experimental setup to analyze 336,043 book reviews. We find empirical evidence that introducing OPV reduces fake reviews, most of which are positive. This reduction of fake reviews results in lower, more representative product ratings and longer and more helpful reviews posted by more experienced reviewers. These new findings extend our understanding of how OPV can improve a platform's reputation ecosystem and suggest managerial interventions for platforms that have yet to develop a verification mechanism.