Studies show that online ratings are one of the most trusted sources of consumer confidence in e-commerce decisions. But recent research suggests that they are systematically biased and easily manipulated.
A few months ago, I stopped in for a quick bite to eat at Dojo, a restaurant in New York City’s Greenwich Village. I had an idea of what I thought of the place. Of course I did — I ate there and experienced it for myself. The food was okay. The service was okay. On average, it was average.
So I went to rate the restaurant on Yelp with a strong idea of the star rating I would give it. I logged in, navigated to the page and clicked the button to write the review. I saw that, immediately to the right of where I would “click to rate,” a Yelp user named Shar H. was waxing poetic about Dojo’s “fresh and amazing, sweet and tart ginger dressing” — right under her bright red five-star rating.
I couldn’t help but be moved. I had thought the place deserved a three, but Shar had a point: As she put it, “the prices here are amazing!”
Her review moved me. And I gave the place a four.
As it turns out, my behavior is not uncommon. In fact, this type of social influence is dramatically biasing online ratings — one of the most trusted sources of consumer confidence in e-commerce decisions.
The theft of more than 100 million customer records from Target late last year has drawn much public and media attention. Consumers remain alarmed that such a large retailer could be hacked so thoroughly.
Cyber threats are a complex global phenomenon, and an international effort drawing on knowledge from a range of disciplines is needed to address it.
One attempt is the joint MIT-Harvard project, Explorations in Cyber International Relations (ECIR), headed by Prof. Nazli Choucri, of MIT’s Political Science department. This collaborative effort, supported by the U.S. Defense Department, is advancing a research agenda involving experts from the MIT Sloan School of Management, MIT’s Political Science and Computer Science Departments, Harvard’s Kennedy School of Government, and Harvard Law School.
Stuart Madnick is the John Norris Maguire professor of information technology at the Sloan School of Management and professor of engineering systems at MIT School of Engineering. For the past five years he has been a participant in Explorations in Cyber International Relations and served on the Executive Committee.
As we continue to recover from a global recession and look to the future, it’s imperative that we build more entrepreneurial-driven academic institutions. Not only will this provide the foundation for much-needed innovation, it also will strengthen economies by providing jobs and fostering sustainable growth in enterprises.
Lessons can be learned from universities around the world about accelerating entrepreneurship. They can provide the model for how to create clusters of commercially successful startups around research-driven institutions. However, the success of that model largely depends on the role of the business school within that university setting.
For retailers, this holiday season has been far from merry. Indeed, much of the cheer retailers have managed to generate has gone to consumers.
Retailing has become a multichannel free-for-all. To the brick-and-mortar giants, online retailers are no longer pesky niche players but life-threatening rivals. The online retail space itself has gotten crowded with formidable competitors. Established stores also must compete with each other and local mom-and-pops for the dwindling number of shoppers willing to brave the frequent snowstorms that hit much of the U.S. in this key shopping month. Add the growing threat of mobile platforms, and your average retailer, online or offline, senses danger everywhere.