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Swayed by friends or the crowd? New insight into how social media changes decisions

Imagine you’re planning to book a hotel room at the Hotel Canal Grande in Venice, Italy.  Before you make a reservation, you’ll probably visit an online ratings site like Trip Advisor to see how many stars previous guests give the hotel.  You might also ask your Facebook friends to see if they have an opinion, too.


Which source is more likely to influence your decision, the user-generated ratings site or your friends?


HP Labs today published a new study answering this very question, following up other recent research on how social influence influences decision-making.  In their new experiment “Swayed by Friends or by the Crowd?”, HP researchers discovered:


- For a user deciding between two choices, an additional rating star has a much larger effect than an additional friend’s recommendation on the probability of selecting an item.

- Negative opinions from friends are more influential than positive opinions.

- People exhibit more random behavior in their choices when the decision involves less cost and risk.


The study validates the intuition that negative reviews from customers are more powerful than positive ones, adding a new dimension to the adage that “satisfied customers tell three friends, angry customers tell 3,000.”


It also suggests that enabling positive and negative feedback to flow equally through online social networks is a potentially powerful feature for users communicating the value of goods and services to each other.


Read the full research report here [PDF] or below.

Swayed by Friends or by the Crowd?

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