Yelp  reviews and consumer reviews on various other sites are supposed to be a more transparent guide to the quality of various goods and services.
But a recent study by researchers from Harvard Business School and Boston University involving reviews of restaurants in the Boston area indicates otherwise. The data presented by researchers suggests that as many as 16 percent of Yelp reviews may be fake.
What’s more, the authors say the incentives created by review sites may actually be encouraging the practice.
In “Fake It Till You Make It: Reputation, Competition, and Yelp Review Fraud”, researchers Michael Luca of Harvard Business School and Georgios Zervas of Boston University explain  (PDF):
“As crowdsourced information becomes increasingly prevalent, so do incentives for businesses to game the system. Our findings suggest that unethical decision making is a function of incentives, rather than of unethical businesses. Organizations are more likely to game the system when they are facing increased competition and when they have poor or less established reputations.”
Newer Businesses More Tempted to Fake Yelp Reviews
Newer businesses or those with few reviews are more tempted to fake it, the study concludes. Researchers mention a trend for businesses to have larger numbers of positive reviews early in their life-cycle as evidence of this. They also conclude that businesses that recently received a bad review may be more tempted to cheat.
While Yelp does filter reviews identified as suspicious using a proprietary algorithm, site visitors can still view them by solving a “captcha” puzzle, the study explains.
Still, penalties can be harsh for businesses caught faking reviews on Yelp or other sites.
For example, businesses recently caught in “Operation Clean Turf” will face a combined $350,000 in fines for fake reviews . The investigation by New York Attorney General Eric T. Schneiderman’s office into allegedly fake Yelp reviews began last year.
Yelp also recently filed suit against a San Diego law firm claiming the company filed fake Yelp reviews .
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