Negative online reviews and consumers’ service consumption

The growing reliance on the Internet as an information source for services raises the need for more research focusing on electronic word of mouth (eWOM). Drawing on construal level theory and the sunk costs fallacy, we examine how psychological distance and prior investments in information search influence service consumers’ reactions to negative eWOM. We find that when consumers perceive the service consumption to be psychologically proximal, temporal investments in information search diminish the impact of negative eWOM on behavioral intentions. This effect is so robust that even a highly negative forum consensus does not mitigate it. Conversely, when the consumption experience is perceived as distal, temporal investments fail to buffer the impact of negative eWOM, and a forum consensus magnifies the impact. Our findings have important implications for service firms, as service consumers may make many of their evaluations and decisions under the influence of psychological distance and sunk costs.