Investigating the effect of status changes in review platforms

Review platforms often use transient status reward systems where the granted status is not permanent, and reviewers can experience gains and losses in status. To evaluate the effectiveness of such systems, review platforms need to consider a trade-off between the potential positive effects of a status gain and the potential negative effects of a status loss on the quantity and characteristics of reviewers’ contributions. This article examines this trade-off. The results of an empirical study that uses matched difference-in-differences analysis of data from Yelp show that: (i) the positive effect of a status gain on the number of reviews is about three times greater than the negative effect of a status loss; (ii) these effects are more pronounced for reviewers with less experience; and (iii) status changes also change the valence and elaborateness of reviews.