The new role of the variance of ratings on decision-making process, considering the loyal customer’s different preference in a brand

Evaluating the combined effect of the average rating and variance of ratings in the consumer decision-making process and its impact on price, demand and profit reveals interesting insights into reducing information asymmetry in e-business. The study examines the effect by constructing a game theory model to extend made under conditions of the loyal cus-tomers’ different characteristics as their preferences that mediate the effect in the consumer decision-making process. The results show that consumers have higher intentions to consume low quality product with a higher variance, which results in increases price, demand and profit. The study further analyses how consumers’ willingness to continue purchasing potentially risky products with a higher variance when they make decisions for two products with similar average ratings. Thus, this study will help managers to anticipate market trends and formulate effective marketing strategies to reduce feelings of uncertainty in the potential buyers purchase decisions.