Business engagement on Twitter: a path analysis

Social media services, such as Twitter, enable commercial businesses to participate actively in online word-of-mouth communication. In this project, we examined the potential influences of business engagement in online word-of-mouth communication on the level of consumers’ engagement and investigated the trajectories of a business’ online word-of-mouth message diffusion in the Twitter community. We used path analysis to examine 164,478 tweets from 96,725 individual Twitter users with regards to nine brands during a 5-week study period. We operationalized business engagement as the amount of online word-of-mouth messages from brand and the number of consumers the brand follows. We operationalized consumers’ engagement as the number of online word-of-mouth messages from consumers both connecting to the brand and having no connection with the brand as well as the number of consumers following the brand. We concluded that the business engagement on Twitter relates directly to consumers’ engagement with online word-of-mouth communication. In addition, retweeting, as an explicit way to show consumers’ response to business engagement, indicates that the influence only reaches consumers with a second-degree relationship to the brand and that the life cycle of a tweet is generally 1.5 to 4 hours at most. Our research has critical implications in terms of advancing the understanding of the business’s role in the online word-of-mouth communication and bringing insight to the analytics of social networks and online word-of-mouth message diffusion patterns.     

The impact of age and shopping experiences on the classification of search, experience, and credence goods in online shopping

This study explores how age and consumers’ Web shopping experience influence the search, experience, and credence (SEC) ratings of products and services in online shopping. Using the survey data collected from 549 consumers, we investigated how they perceived the uncertainty of product quality on six search, experience, and credence goods. The ANOVA results show that age and the Web consumers’ shopping experience are significant factors. A generation gap is identified for all but one experience good. Web shopping experience is not a significant factor for search goods but is for experience and credence goods. There is an interaction effect between age and Web shopping experience for one credence good. Implications of these results are discussed.     

Who wins when price information is more ubiquitous? An experiment to assess how infomediaries influence price

Internet retailers often make use of price search services (infomediaries) that have the effect of reducing consumer search and expanding seller market presence. Research on price and advertising suggests that this may not be a profitable strategy. We develop an experimental posted-offer market to estimate the impact of infomediaries on price of homogenous goods. We analyze panel data from a range of market conditions that address how infomediaries services affect both seller-level offered price as well as market-level transacted price. We find that, while sellers attempt to extract higher prices through a higher initial offer price when using an infomediary, they fail to successfully collect it; transacted prices remain largely unchanged. As a consequence the benefits of infomediaries fall primarily to the buyer who faces largely unchanged transacted prices, and substantially reduced search costs. Search costs are, in essence shifted to the seller. Sellers who participate in this sort of price comparison should be aware that they are following a high-volume/low profit per unit strategy.     

The effect of firm number on equilibrium product positioning and pricing: a marketing–production perspective

We examine how product design and pricing are affected when the number of firms in the market increases by considering marketing and production variables. We employ a model that adopts marketing notions such as market shares and ideal points to dictate the attraction of the product to consumers. The model also incorporates production costs where the cost of the product increases linearly with increasing product attribute levels. The modeling framework facilitates the existence of a Nash equilibrium in prices and product positions. The number of firms in the market is exogenously defined. When the number of firms in the market increases, firms lower their prices and design their product with features closer to the market's ideal point. This results in lower profits.     

The Market for Video on Demand

In spite of predictions to the contrary, video on demand service has yet to become a significant channel for distribution of audiovisual entertainment to consumers’ homes. In this paper, we examine the market for video on demand service under the assumption that quality of service is a threshold factor that consumers take into consideration when making their purchasing decision. Given this characteristic of consumer behavior, we model the joint demand for video on demand service and broadband network access. We then proceed to characterize the optimal solution to monopolist and duopolist content providers’ price and quantity decisions in this market. The comparative statics results are extended in a two-period game theoretic framework that addresses the timing issue of service adoption.     

Adverse Weather and Commuting Speed

This paper investigates the welfare effect of travelling through congested areas and adverse weather through changes in the speed of individuals’ car trips based on the entire commuting trip. Weather measurements are local and time specific (hourly basis). As most commuters travel twice a day between home and work, we are able to employ panel data techniques, which deals with issues related to unobserved heterogeneity and data selection. We find that travelling through congested areas reduces speed by about 7%. For most commuters the welfare effects of adverse weather conditions are negative but small. However, the commuters’ welfare costs due to rain are rather substantial during the evening peak in congested areas (and up to 12% of the overall commuting costs).     

Product type and consumers’ perception of online consumer reviews

Consumers hesitate to buy experience products online because it is hard to get enough information about experience products via the Internet. Online consumer reviews may change that, as they offer consumers indirect experiences about dominant attributes of experience products, transforming them into search products. When consumers are exposed to an online consumer review, it should be noted that there are different kinds of review sources. This study investigates the effects of review source and product type on consumers’ perception of a review. The result of the online experiment suggests that product type can moderate consumers’ perceived credibility of a review from different review sources, and the major findings are: (1) consumers are more influenced by a review for an experience product than for a search product when the review comes from consumer-developed review sites, and (2) a review from an online community is perceived to be the most credible for consumers seeking information about an experience product. The findings provide managerial implications for marketers as to how they can better manage online consumer reviews.     

Internet Advertising, Game Theory and Consumer Welfare

The aim of this paper is to consider the implications of Internet advertising, for prospective consumer welfare gains/losses. The implications of imperfect information among buyers are discussed to highlight the role of intermediaries and search agents in enhancing consumer welfare in a world of complex products and uncertainty. The argument demonstrates that despite possessing welfare enhancing potential the retailing of complex products on the Internet increases the scope for price discrimination among sellers. Hence, buyers may pay different prices for the same product/services. The paper shows how agents may restrict this type of market failure if they possess the ability to search all databases. That the Internet intrinsically exhibits welfare enhancing and reducing characteristic a game model is develop to show how entry of new sellers may proceed or be checked by incumbents.     

Do countercyclical-weekend effects persist in online retail markets?

Contrary to classical economic price theory, Warner and Barsky [Warner, Elizabeth J., and Barsky, Robert B. The timing and magnitude of retail store markdowns: Evidence from weekends and holidays. Quarterly Journal of Economics, 110, 2, 1995, 321–352.] show that in traditional off-line markets, prices on average tend to be lower on weekends despite higher aggregate demand. Their explanation for this effect is rooted in the existence of consumers’ search and transportation costs. We argue that since these costs are significantly reduced in many online retail market environments, this “weekend effect” should be weakened substantially. Our empirical evidence suggests that in fact, there are few statistically significant day-of-the-week price differences in the online markets we study, and the estimated magnitude of these differences is quite small.     

Affiliated marketing

In information-intensive environments some firms may be sending their customers to other firms’ or affiliates’ websites in order to generate additional sales for their affiliates. Although this may provide a choice for the customers, from a firm’s point of view such strategies have the potential to cannibalize own sales. Hence, when customers purchase from other firms’ websites, the firm may loose its own customers. This study analyzes the optimality of such strategies using an analytical framework. The findings show that a firm may increase its prices and profit when its own customers purchase from other firm websites. An analysis of customer surplus and total welfare show that such strategies may have adverse effects. The results show that customer surplus and total welfare may decrease as a result of affiliations.     

The Neutrality of Money Revisited with a Bottom-Up Approach: Decentralisation,Limited Information and Bounded Rationality

In the mainstream top-down approach, money is neutral except with special assumptions. Intending to make money “essential”, random-matching models introduced decentralisation by considering pair-wise transactions. Nevertheless, in both cases top-level equilibrium constrains agents’ behaviour. Instead, here we use a bottom-up approach. In a competitive market, decentralised autonomous agents meet and exchange a commodity for money. Their decisions use minimal information. They are triggered by simple rules founded on a “satisficing” procedure and on a random decision process that simulates bounded rationality. The conclusions are, first, that non-monetary costs are essential to avoid collapse of the economy. Second, mainly “price setters” who are adequately satisfied achieve equilibrium protecting themselves by evolving advantages to avoid competition that is too tough. Third, and the most important conclusion is that money ceases to be neutral as soon as competition arises between individual firms.     

Understanding the behavior of mobile data services consumers

Due to rapid advances in the Internet and wireless technologies, a ubiquitous computing world is becoming a reality in the form of mobile computing. At the center of this phenomenon is mobile data services which arise from the convergence of advanced mobile communication technologies with data services. Despite the rapid growth in mobile data services, research into consumers’ usage behavior is scarce. This study attempts to identify and empirically assess the factors that drive consumers’ acceptance of mobile data services. A research model based on the decomposed theory of planned behavior and incorporating factors that represent personal needs and motivations in using mobile data services is presented. The model is tested via an online survey of 811 consumers of four categories of mobile data services (i.e., communications, information content, entertainment, and commercial transactions) associated with different usage contexts. We found that attitude, social influence, media influence, perceived mobility, and perceived monetary value influence consumers’ intention to continue usage of mobile data services. In addition, perceived ease of use, perceived usefulness, and perceived enjoyment influence attitude toward continued usage of mobile data services. Finally, separate analysis of the different categories of mobile data services highlights the influence of individual usage context on consumers’ behavior.

The importance of trusting beliefs linked to the corporate website for diffusion of recruiting-related online innovations

Recruiting-related online innovations represent growing and high-potential opportunities for employers to broaden the reach of their recruiting efforts as well as reduce costs. The diffusion of innovative approaches for online recruiting, however, may experience bias due to potential employees’ lack of trust in firms offering positions online, particularly when the firms are small, operate in a risky industry, or are relatively unknown. We use the theory of reasoned action to propose that users of a corporate website develop trust beliefs with regard to three characteristics of the firm: ability, integrity, and benevolence. We have proposed three hypotheses highlighting the importance of trust generated by the corporate website in potential employees. Our experimental results involved a sample of 218 potential employees. These subjects were offered a consulting position in a fictional firm, which could only be known through its corporate website. Although previous literature has paid marginal attention to the influence of users’ beliefs regarding corporate integrity and benevolence, our findings showed that users’ perceptions of the corporate website regarding firm integrity and benevolence increased the users’ willingness to accept a job at the firm. We propose implications of our results for practitioners and for the literature of trust in online contexts.     

Automating user reviews using ontologies: an agent-based approach

The Web is becoming a global market place, where the same services and products are offered by different providers. When obtaining a service, consumers have to select one provider among many alternatives to receive a service or buy a product. In real life, when obtaining a service, many consumers depend on the user reviews. User reviews—presumably written by other consumers—provide details on the consumers’ experiences and thus are more informative than ratings. The down side is that such user reviews are written in natural language, making it extremely difficult to be interpreted by computers. Therefore, current technologies do not allow automation of user reviews and require too much human effort for tasks such as writing and reading reviews for the providers, aggregating existing information, and finally choosing among the possible candidates. In this paper, we represent consumers’ reviews as machine processable structures using ontologies and develop a layered multiagent framework to enable consumers to find satisfactory service providers for their needs automatically. The framework can still function successfully when consumers evolve their language and when deceptive reviewers enter the system. We show the flexibility of the framework by employing different algorithms for various tasks and evaluate them for different circumstances.     

Stackelberg Strategies for Selfish Routing in General Multicommodity Networks

A natural generalization of the selfish routing setting arises when some of the users obey a central coordinating authority, while the rest act selfishly. Such behavior can be modeled by dividing the users into an α fraction that are routed according to the central coordinator’s routing strategy (Stackelberg strategy), and the remaining 1−α that determine their strategy selfishly, given the routing of the coordinated users. One seeks to quantify the resulting price of anarchy, i.e., the ratio of the cost of the worst traffic equilibrium to the system optimum, as a function of α. It is well-known that for α=0 and linear latency functions the price of anarchy is at most 4/3 (J. ACM 49, 236–259, 2002). If α tends to 1, the price of anarchy should also tend to 1 for any reasonable algorithm used by the coordinator. We analyze two such algorithms for Stackelberg routing, LLF and SCALE. For general topology networks, multicommodity users, and linear latency functions, we show a price of anarchy bound for SCALE which decreases from 4/3 to 1 as α increases from 0 to 1, and depends only on α. Up to this work, such a tradeoff was known only for the case of two nodes connected with parallel links (SIAM J. Comput. 33, 332–350, 2004), while for general networks it was not clear whether such a result could be achieved, even in the single-commodity case. We show a weaker bound for LLF and also some extensions to general latency functions. The existence of a central coordinator is a rather strong requirement for a network. We show that we can do away with such a coordinator, as long as we are allowed to impose taxes (tolls) on the edges in order to steer the selfish users towards an improved system cost. As long as there is at least a fraction α of users that pay their taxes, we show the existence of taxes that lead to the simulation of SCALE by the tax-payers. The extension of the results mentioned above quantifies the improvement on the system cost as the number of tax-evaders decreases. Research of G. Karakostas supported by an NSERC Discovery Grant and MITACS. Research of S. Kolliopoulos partially supported by the University of Athens under the project Kapodistrias.     

Competitive pricing with dynamic asymmetric price effects

We model the temporal pricing strategies for two firms with asymmetric costs and differing market power (i.e. big‐box retailer versus smaller local merchant). A firm's demand is a function of its price, a reference price and its competitor's price. Price effects may be asymmetric, i.e. consumers respond differently if they perceive a good to be over‐priced versus under‐priced. We derive analytical results for optimal prices. We show through a series of numerical examples under what settings firms choose various pricing strategies as well as profit implications for firms with differing costs.     

基于价格歧视的双寡头竞争企业网络广告投放模式测评与策略研究

双寡头竞争企业网络广告投放决策问题是网络营销企业面对的重要决策问题.鉴于此,重点考虑大众广告和定向广告两类网络广告,首先针对广告成本和消费者特征,给出用户群的效用函数和产品空间位置;然后,分别针对客户均匀分布和非均匀分布状况下的两类广告进行测评;最后基于测评结果深入研究定向广告的投放概率和策略选择问题.研究结果显示:无论消费者呈现均匀分布还是非均匀分布,定向广告的投入会使企业获利,但大众广告会同时降低两家竞争企业的利润,使得企业陷入囚徒困境,此外,实施价格歧视总是优于非歧视定价;网络广告的边际投放强度起到双向调节作用,定向广告的投放不总是有利的;当定向广告成本过高时,企业应当采用防御型策略;歧视定价时发放定向广告的数目总是高于非歧视定价.     

Toward microeconomic allocation of resources in multi-service overlay networks

The main challenge in overlay multicasting is designing self-organizing mechanisms that can be able to exploit the inherent selfishness of the end-user nodes in such a way that the aggregate outcome of the activity of individual nodes behaving toward their own self-interests still leads to maximization of the network’s aggregate utility. We believe that the microeconomic theory is a good candidate to investigate this problem. Since each consumer in the economy acts as a selfish utility maximizer, the behavior of each end-host in the overlay network can be mapped to that of a consumer in the economy. We present a competitive economical framework in which a number of independent services are provided to the users by a number of origin servers. Each offered service can be thought of as a good and the origin servers and the users who relay the service to their downstream nodes can thus be thought of as firms of the economy. Also, the end-hosts can be viewed as consumers in the economy. On joining to the overlay network, each end-host is provided with an income and tries to obtain the services. The mechanism tries to regulate the price of each service in such a way that general equilibrium holds. For this property to hold in all generality, it tries to find a vector of prices such that demand of each service becomes equal to its supply. So, all allocations will be Pareto optimal in the sense that maximize welfare of the users.