Exploring the effect of exaggerated informational signals on shaping paradoxical behaviors: evidence from cosmetic consumers

Purpose The current research explores how exaggerated reviews in the cosmetics industry influence consumer purchase behavior. Specifically, it examines how review valence and information content contribute to the development of fake online reviews and considers their consequences on consumer behavioral responses, including negative word-of-mouth, customer paranoia and purchase decisions. Review reliance moderates the relationship between fake reviews and behavioral outcomes. Design/methodology/approach An online survey was used to gather data from 355 Pakistani cosmetic customers by using purposive sampling. To confirm the proposed hypotheses, we conducted a PLS-SEM analysis employing Smart-PLS 4.0. Findings The findings show that the reviews signals – valence and information contents – significantly develop fake online reviews. These fake reviews have a significant influence on consumers’ behavioral responses, while having a significant positive effect on negative word-of-mouth and consumer paranoia. However, fake reviews have an insignificant influence on purchase decisions. Review reliance significantly moderates the effect of fake reviews on behaviors outcomes. Originality/value This is the initial step to applies signaling theory to understand behavioral outcomes related to fake online reviews in the cosmetics industry of Pakistan. It reveals how review valence and information content act as signals that influence consumer behavior. Findings show that fake reviews restrict consumer choice, prompting consumers to adopt protective strategies to mitigate online purchasing risks. This study offers valuable insights for cosmetics brands, helping them to devise strategies to counter the challenges posed by fake online reviews.