Strategic Behavior by Market Intermediaries

Research summary We explore how information intermediaries preserve relationships with firms they cover and differentiate from competitors while also maintaining legitimacy with their audiences. We find that intermediaries evaluating movies and video games delay disclosing more negative reviews of heavily marketed products so that they do not coincide with the major product marketing push. We also find that media organizations artificially differentiate themselves from their competitors. We demonstrate that critics are more deviant when they can observe another's opinion and that differentiation increases when they tend to evaluate the same types of products. Our interpretation is that information intermediaries do not simply provide objective reviews, but instead appear strategic in balancing pressures from product "suppliers" and competitors as they compete for the attention of their audiences. Managerial summary We argue that film and video game reviews by professional media outlets reflect two types of strategic behavior. First, intermediaries evaluating movies and video games delay disclosing more negative reviews of heavily marketed products. Second, critics artificially deviate their review scores from those of close competitors. We conclude that information intermediaries do not simply provide objective reviews, but instead appear strategic in balancing pressures from product "suppliers" and competitors as they compete for the attention of their audiences.