Yelp, has reported 20% rise in proportion of fake reviews during 2013, compared to 5% in 2006, saying that quarter of the reviews it receives could be fake.
According to the online directory and consumer review site, about a quarter of the received reviews could be bogus, as businesses more and more try to bias consumers’ opinions.
However, a study by Harvard Business School revealed that around 16% of reviews of Boston restaurants posted to Yelp, including those being filtered out, are fake.
The study analysed that that negative fake reviews are rising with rise in competition, while positive fake reviews were used to reinforce a weak reputation or to offset ugly reviews.
The study authors including Michael Luca of Harvard Business School and Georgios Zervas of Boston University revealed that as crowdsourced information becomes ever more prevalent, so do incentives for businesses to game the system.
"Organisations are more likely to game the system when they are facing increased competition and when they have poor or less established reputations," they noted.
"For managers, policymakers, and even end-users investigating review fraud, this sheds light on the situations where reviews are most likely to be fraudulent.
"More generally, this casts light on the economic incentives that lead organisations to violate ethical norms."
During the past week, about 19 firms, including Yelp and CitySearch, have been fined $350,000 by New York for allegedly generating fake online reviews for businesses.
