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• Working Paper | HBS Working Paper Series | 2013

  The Benefits of Product Quality Disagreement - When Divergent Reviews Drive Online Word of Mouth

  Frank Nagle, Christoph Riedl, Frank Nagle and Christoph Riedl

  A consumer's decision to leave an online product review may not only depend on satisfaction with the product but may depend on other product characteristics and on social effects, including the disagreement among previously posted reviews. We develop and test a theoretical model that extends and advances the disparate literature about online word of mouth (WOM) by accounting for social effects (particularly disagreement), product effects, and their interaction, on consumers' propensity to write online product reviews. To quantify disagreement, we introduce a new measure based on an expectation-maximization algorithm for finite mixture models as a summary statistic for the mostly non-normally distributed review ratings. In addition to numerical star-ratings, we use sentiment analysis and automated nonparametric content analysis of review texts to measure disagreement in consumer opinions. We test our model on nearly 280,000 reviews for 433 movies and find the propensity to review is higher when there is high disagreement about the movie's quality. We also find that while high disagreement generates a 35% increase in WOM for niche products, it leads to an 8% decrease in WOM for hit products. Finally, we find that the positive effect of disagreement is amplified by the length of the textual reviews but dissipates over time.

  Keywords: online word of mouth; online communities; Viral Marketing; online product reviews; consumer behavior;

  Citation:

  Nagle, Frank, and Christoph Riedl. "The Benefits of Product Quality Disagreement - When Divergent Reviews Drive Online Word of Mouth." Harvard Business School Working Paper, No. 13–091, May 2013.

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• Working Paper | HBS Working Paper Series | 2013

  The Benefits of Product Quality Disagreement - When Divergent Reviews Drive Online Word of Mouth

  Frank Nagle, Christoph Riedl, Frank Nagle and Christoph Riedl

  A consumer's decision to leave an online product review may not only depend on satisfaction with the product but may depend on other product characteristics and on social effects, including the disagreement among previously posted reviews. We develop and test a theoretical model that extends and advances the disparate literature about online word of mouth (WOM) by accounting for social effects (particularly disagreement), product effects, and their interaction, on consumers' propensity to write online product reviews. To quantify disagreement, we introduce a new measure based on an expectation-maximization algorithm for finite mixture models as a summary statistic for the mostly non-normally distributed review ratings. In addition to numerical star-ratings, we use sentiment analysis and automated nonparametric content analysis of review texts to measure disagreement in consumer opinions. We test our model on nearly 280,000 reviews for 433 movies and find the propensity to review is higher when there is high disagreement about the movie's quality. We also find that while high disagreement generates a 35% increase in WOM for niche products, it leads to an 8% decrease in WOM for hit products. Finally, we find that the positive effect of disagreement is amplified by the length of the textual reviews but dissipates over time.

  Keywords: online word of mouth; online communities; Viral Marketing; online product reviews; consumer behavior;

  Citation:

  Nagle, Frank, and Christoph Riedl. "The Benefits of Product Quality Disagreement - When Divergent Reviews Drive Online Word of Mouth." Harvard Business School Working Paper, No. 13–091, May 2013.

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• Chapter | Oxford Bibliographies: Management | 2013

  Technology and Innovation Management

  Elizabeth J. Altman, Frank Nagle and Michael Tushman

  The goal of this annotated bibliography on technology and innovation is to organize and present the most important literature relevant to a scholar seeking to understand and advance the field. It includes articles that are highly-cited and foundational pieces, as well as recent articles that help give the reader a sense of where the field is headed and where likely opportunities for future research lie. This article seeks to strike an equilibrium among the variety of perspectives that exist in technology and innovation literature, balancing new and old research as well as economic, organizational, and cross-disciplinary methodologies. The innovative process is broadly considered here, as well as the technologies that result from it, including business model innovation, service-level innovation, and product innovation, highlighting articles that utilize diverse levels of analysis.

  Keywords: technology; technological change; innovation streams; organizational evolution; executive leadership; organizational architecture; Technology; Technological Innovation; Innovation and Management; Organizational Change and Adaptation; Leadership; Organizational Design;

  Citation:

  Altman, Elizabeth J., Frank Nagle, and Michael Tushman. "Technology and Innovation Management." In Oxford Bibliographies: Management, edited by Ricky W. Griffin. New York: Oxford University Press, 2013.

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