Playing the online word-of-mouth system

Abstract

The video game market is one of the most important in the entertainment industry and is intrinsically tied to the online world. This work project evaluates the causal relationship between online user reviews of video games and their number of owners, via a kernel propensity score matching difference-in-differences regression. It concludes that no causal relationship can be established because the average treatment effect is statistically non-significant. Robustness checks are conducted, changing the time period analysed and the definition of the treatment variable, and the results remain unchanged. Policy implications for video game companies are discussed, incentivising better brand power management.