The spillover effects of review manipulation on competitors in the platform economy: Evidence from cross-platforms in the OTA sector

With the rapid development of the platform economy, review manipulation has become an unethical means for platform sellers to obtain web traffic. Integrating the supply-side traffic competition perspective and demand-side consumer defense perspective, we study the spillover effect of review manipulation on competitors with different competitive relationships (direct vs. indirect) and positions (top-ranking vs. non-top-ranking). The results show that: 1) Seller’s review manipulation has a significant spillover effect on its direct competitors. A 1% increase in the intensity of review manipulation, corresponding to a 1% increase in the proportion of fake positive reviews, results in an average 0.039% increase in the sales for the top-ranking direct competitors, while sales for the non-top-ranking direct competitors decrease by an average of 0.026%. 2) Seller’s review manipulation has no significant spillover effect on its indirect competitors. 3) Brand strength and product price weaken the positive spillover effect of review manipulation on top-ranking direct competitors and strengthen the negative spillover effect on non-top-ranking direct competitors. The conclusions challenge the intuition that sellers’ review manipulation could “hurt the others to benefit oneself” and reveal that review manipulation by direct competitors may actually benefit the top-ranking sellers on the platform. This paper provides implications for the governance of platform misconduct as well as the high-quality development of the platform economy.