Author(s)

Tian Li, Hong Yu, Jiamin Wu

Corresponding Author

Tian Li

Abstract

Online consumer reviews, as a new type of word-of-mouth information, play an increasingly important role in consumer purchasing decisions. At the same time, online consumer reviews can also influence corporate information disclosure decisions. This paper proposes a mathematical model, aiming at the maximum profit of the merchants, and finds the best decision for the disclosure of product quality information under different disclosure levels. The main conclusions are as follows: (1) Under the influence of disclosure costs and online comments, there is a peak in the degree of disclosure of product quality information by enterprises. When the disclosed quality information is less than the optimal value, increasing the disclosure quality information will increase the profit of the enterprise; when the quality information disclosed is greater than the optimal value, the enterprise should choose to reduce the disclosure quality information. (2) The higher the product quality, the company should choose to disclose the product quality information to obtain more market profits.

Keywords

Consumer reviews; degree of disclosure; pricing