User reviews and uncertainty assessment: A two stage model of consumers' willingness‐to‐pay in online markets

We develop a two‐stage conceptual consumer decision model from the risk perspective to understand the role of online user reviews in consumers' Willingness‐To‐Pay (WTP). In stage one, consumers assess product uncertainty with product reviews. In stage two, they assess seller uncertainty with seller reviews, conditional on their assessment of product uncertainty in stage one. We further develop an operationalization of our conceptual model using the expected utility theory and derive hypotheses on the effects of online user reviews on consumers' WTP. We test our hypotheses using data from an experimental study and an empirical study.