What Drives Fake Reviews (Restaurants)

In a new paper Luka and Zervas (July 2013) argue:

We find that a restaurant's changing reputation affects its decision to engage in review fraud. Specifically, a restaurant is more likely to seek a positive fake review when its reputation is weak, i.e., when it has few reviews, or it has recently received bad reviews. Consistent with theory, we find that chains are less likely than independent restaurants to engage in review fraud. We then turn our attention to negative review fraud, and find that increased competition by similar restaurants the driving force behind it.