User-generated ratings — often elicited and presented as “star ratings” — have become a ubiquitous feature of the online consumer experience. While most research agrees that these user-generated ratings influence individual consumer decisions and overall consumer demand, there is less consensus as to whether user- generated ratings help consumers make better, welfare-enhancing decisions. In this manuscript, we expound on an intrinsic problem with the use of user-generated ratings in product choice decisions. Specifically, product ratings are typically given in an isolated (non-comparative) context, but are typically used in a comparative context, where relative differences in ratings may not reflect relative differences in quality. We provide a simple empirical demonstration of how this structural misalignment can lead consumers to choose suboptimal products and, ultimately, yield reduced consumer welfare.

This work examines the extent to which people hold independent sequential events (e.g., players making correct/incorrect guesses) responsible for overall outcomes (e.g., the team winning/losing the game). Two types of events are found to garner the majority of responsibility for overall outcomes: (1) final events and (2) events that are perceived to disrupt momentum (e.g., an incorrect guess after a sequence of correct guesses). While previous research has shown that final events tend to be perceived as more responsible for overall outcomes, the current experiments are the first to document the role of perceived momentum on responsibility judgments. Specifically, we demonstrate that the effect is mediated by perceived momentum changes after the time of the event and moderated when exogenous factors (e.g., a delay between events) disrupt perceived momentum. We discuss how these findings relate to pivotality, the counterfactual simulation model, and the role of unexpectedness in responsibility judgments.