The influence of relative popularity on negative fake reviews: A case study on restaurant reviews

Fake reviews are rising as online reviews become more prevalent. However, little is known about the mechanism underlying firms’ negative fake reviews. This study draws on signaling theory to analyze the effect of a firm’s relative popularity (vs. its competitors) on receiving negative fake reviews. Based on Yelp data for restaurants in New York City, we show that a restaurant’s relatively higher popularity over its competitors increases the number of negative fake reviews it receives. The positive impact of relative popularity on negative fake reviews is weakened by the restaurant’s reputation and competitors’ popularity. The effect is weaker for chain restaurants than for independent restaurants. This study examines the generation mechanism of negative fake reviews from a competition perspective and emphasizes relative popularity as a motivator behind such reviews. Implications for review system design and restaurant management are provided.