The influence of information cascades on online purchase behaviors of search and experience products

Online users usually observe or refer to others’ behaviors and discount their own information when purchasing products online. This research employed a fixed-effect regression model to elucidate how information cascades could influence online purchase behaviors and how they moderated the influence of online word-of-mouth and product prices. To uncover the underlying mechanisms behind informational cascades, we compare search products and experience products. In particular, we utilize publicly available data from a B2C e-commerce site in China, i.e., Tmall.com. Our results indicate that online users’ choice of products was heavily driven by changes in product rankings after controlling for cumulative sales, online user reviews and product price, as predicted by informational cascades theory. Due to the information cascades effect, review volume had no impact on online users’ choice of products with high rankings, whereas it did exert a significant positive impact on consumer purchase decisions of products with low rankings. User rating had no impact on online users’ purchase decisions. Product price had a significant and negative impact for products with high rankings, but had a significant and positive influence on users’ choice for products with low rankings. Moreover, information cascades were more prominent for experience goods than for search goods.     

Information Exchange in Virtual Communities: A Comparative Study

As more and more consumers spend more money on the Internet, traditional retailers and manufacturers as well as entrepreneurial dot-coms are jousting to explore and shape this new business opportunity. Their long-term survival and profitability may be determined by how well the Web site helps form and sustain positive attitudes toward the site and, eventually, toward the product or the company. The purpose of this study is two-fold: (1) to examine if and how attitude toward the Web site (A_st) affects consumer brand choice; and (2) to examine the association between A_st and consumers' confidence in choice, and the moderating effect of consumer product knowledge in its relationship. The study asked participants to choose a laptop brand after visiting three laptop manufacturer Web sites for a total of 30 minutes. Their product knowledge and attitude toward the three Web sites were also measured. The study found that attitude toward the Web site is a good predictor of consumer brand choice. In addition, confidence in choice seemed to be affected by A_st, depending on product knowledge. For a group with low product knowledge (novices), A_st was likely to influence confidence in choice. For a group with high product knowledge (experts), however, A_st did not seem to affect confidence in choice.     

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.     

Online information search and decision making: Effects of web search stance

A naturalistic online information search exposes individuals to multiple sites and conflicting perspectives. In this study, we evaluated how the holistic stance of a web search toward a product influences purchasing decisions. We recruited 109 participants who completed an initial product choice task regarding bottled water, a brief Internet search, and then a second post-search product choice task. Internet searches were analyzed to identify query terms, site visits, and stance. Results show that query terms influenced the types of sites obtained in a search, which in turn shaped the overall search stance. Participants were more likely to buy bottled water when they visited websites that emphasized environmental, economic, or health benefits for bottled water (i.e., positive stance). Participants who were asked to focus on environmental issues were less likely to buy bottled water unless packaged in recycled plastic.     

Perceptions of Customer Service,Information Privacy,and Product Quality From Semiotic Design Features in an Online Web Store

The rise of the World Wide Web for electronic commerce has led to a proliferation of companies selling products online. The global nature of the Internet allows customers to browse the products of companies with which they are wholly unfamiliar. However, concerns about customer service, information privacy, and product quality discourage purchasing from unknown companies. In this article, the effects of semiotic Web design features on expectations of these performance criteria in a purchase situation are investigated. Specifically, the presence and prominence of links to customer service and a site privacy policy, and the existence of product ratings and customer testimonials, were tested to measure their effects on customer perceptions and expectations. Results indicate that some design features have a strong semiotic effect on customer expectations. Prominent links to customer service and a site privacy policy significantly increased expectations of customer service and privacy protection. The presence of product ratings increased perceptions of product quality. All 3 design features led to increased likelihood of purchase. Furthermore, participants were not aware of these effects and reported not considering product ratings in their decisions. Implications of these results on Web site design and consumer behavior are discussed.     

An investigation into the effects of product design on incremental and radical innovations from the perspective of consumer perceptions: Evidence from China

By integrating research on product design with ideas from marketing and consumer perceptions, this paper formulates a set of coherent hypotheses about the effects of tripartite design dimensions on consumer perceptions and responses. We conduct two surveys on incremental and radical technology innovations, respectively, and accordingly get two different samples to test the hypotheses. Empirical results reveal that the effects of aesthetic and functional dimensions on consumer purchase intention and word of mouth vary across two types of innovations. Specifically, for incrementally innovative products, aesthetic and functional dimensions influence consumer purchase intention and word of mouth, both directly and indirectly, through the mediation of consumer perceived quality. By contrast, for radically innovative products, the effects of aesthetic and functional dimensions on purchase intention and word of mouth are totally mediated by perceived quality. Additionally, the effects of symbolic dimension on consumer perceptions and responses achieve consistency across radical and incremental technology innovations. That is, the higher the level of symbolic dimension, the stronger purchase intention and the better word of mouth there will be, whereas the direct influence of symbolic dimension on perceived quality is not significant in either innovation category.     

An information gain-based approach for recommending useful product reviews

Recently, many e-commerce Web sites, such as Amazon.com, provide platforms for users to review products and share their opinions, in order to help consumers make their best purchase decisions. However, the quality and the level of helpfulness of different product reviews are not disclosed to consumers unless they carefully analyze an immense number of lengthy reviews. Considering the large amount of available online product reviews, this is an impossible task for any consumer. Therefore, it is of vital importance to develop recommender systems that can evaluate online product reviews effectively to recommend the most useful ones to consumers. This paper proposes an information gain-based model to predict the helpfulness of online product reviews, with the aim of suggesting the most suitable products and vendors to consumers. Reviews are analyzed and ranked by our scoring model and reviews that help consumers better than others will be found. In addition, we also compare our model with several machine learning algorithms. Our experimental results show that our approach is effective in ranking and classifying online product reviews.     

Predicting consumer intentions to shop online: An empirical test of competing theories

The proliferation of commercial Web sites providing consumers with a new medium to purchase products and services has increased the importance of understanding the determinants of consumer intentions to shop online. This study compared the technology acceptance model and two variations of the theory of planned behavior to examine which model best helps to predict consumer intentions to shop online. Data were gathered from 297 Taiwanese customers of online bookstores, and structural equation modeling was used to compare the three models in terms of overall model fit, explanatory power and path significance. Decomposing the belief structures in the theory of planned behavior moderately increased explanatory power for behavioral intention. The results also indicate that the decomposed theory of planned behavior provides an improved method of predicting consumer intentions to shop online. Finally, the implications of this study are discussed.     

Predicting consumer intentions to shop online: An empirical test of competing theories

The proliferation of commercial Web sites providing consumers with a new medium to purchase products and services has increased the importance of understanding the determinants of consumer intentions to shop online. This study compared the technology acceptance model and two variations of the theory of planned behavior to examine which model best helps to predict consumer intentions to shop online. Data were gathered from 297 Taiwanese customers of online bookstores, and structural equation modeling was used to compare the three models in terms of overall model fit, explanatory power and path significance. Decomposing the belief structures in the theory of planned behavior moderately increased explanatory power for behavioral intention. The results also indicate that the decomposed theory of planned behavior provides an improved method of predicting consumer intentions to shop online. Finally, the implications of this study are discussed.     

Visualizing E-Brand Personality: Exploratory Studies on Visual Attributes and E-Brand Personalities in Korea

The brand personality of an online product and service, usually represented by a Web site, is known as its e-brand personality. In the competitive conditions of online markets, e-brand personality is agreed to be an important factor in securing distinctive identity; however, few studies have suggested how to establish e-brand personality through the visual design of Web sites. This study explores the feasibility of constructing target e-brand personalities for online services by using visual attributes. It consists of 3 consecutive studies. The 1st study identified four major dimensions of e-brand personality on diverse Web sites. The 2nd study used 52 experimental home pages to identify key visual attributes associated with those 4 personality dimensions. The 3rd study explored whether those findings from the 2nd study can be applied in constructing Web sites for online services. The results showed that 2 visual attributes-simplicity and cohesion-are closely related to a bold personality. Three attributes-contrast, density, and regularity-can be used to create a Web site that has an analytical personality. Contrast, cohesion, density, and regularity are closely related to a Web site that is perceived to have a friendly personality. Regularity and balance were expected to be related to the sophisticated personality dimension, but no such relation was identified in the 3rd study. The article concludes with a discussion of implications, limitations, and future research directions.     

Pricing strategies for tied digital contents and devices

Media companies are increasingly offering digital content to consumers. Many of these companies are tying digital content with their proprietary digital devices. In this study, we develop a consumer demand model for digital device and digital content based on a constant elasticity demand function. In modeling consumer valuation of the digital device, we take consumer surplus on digital content into account. We further derive equilibrium prices for digital devices based on an oligopoly competition model with horizontal product differentiation. We analyze the equilibrium prices and how prices affect firm profits. We find product differentiation and the level of product substitutability affect prices. We also find that content price plays a significant role in affecting the price of the digital device. Content price can either increase or decrease the tied digital device price depending on the profit margin and demand elasticity of the digital content. We further analyze how content and device prices affect their respective profits and the overall profit of the firm. We extend our model to vertical product differentiation and find vertical product differentiation and the level of product quality affect prices.     

Choquet integral-based product satisfaction inference in consideration of subjective decision-making tendencies

As the Social Commerce market continues to expand, the number of consumers desiring to buy quality products through the Internet increases. The number of products in similar categories, however, is so large that it is difficult for a consumer to choose a product based on price and discount rates. In addition, it is difficult to recommend certain products according to the subjective tendencies of individual buyers. Thus, this study suggests a product satisfaction inference method reflecting the users preferences based on such variables as price, discount rate, number of buyers, and purchase satisfaction, which are most influential in choosing and purchasing goods. To this end, the level of product satisfaction was assessed by determining the Fuzzy Membership Function for each condition of decision-making and Fuzzy Logic-based FIS. To evaluate the level of product satisfaction in reflection of users subjective tendencies, with the disadvantages of FIS excluded, subjective decision-making tools Choquet Integral method and AHP were suggested.     

Practices, Perceptions and Avenues of Net-Based Promotions

Net as a medium is endowed with unique characteristics that has assisted the growth of e-commerce and in turn increased use of net-based sales promotions. The paper examines the practices, perceptions of net users and avenues of consumer sales promotions through this medium. To gain insight into current practices, consumer sales promotion on general, specialised and e-commerce sites were studied. An online survey of 161 net users was carried out to examine perceptions of net-based promotions over ten dimensions. The most frequently promoted product categories across sites were apparel, airlines, and books. Price-off followed by free gift offer was the most commonly used type of promotions. The results of various ANOVA tests revealed that perceptions did not vary across type of promotions but varied across product categories. Based on these findings managerial implications are discussed.     

User satisfaction from commercial web sites: The effect of design and use

We empirically investigated the effect of user-based design and Web site usability on user satisfaction across four types of commercial Web sites: online shopping, customer self-service, trading, and publish/subscribe. To this end, a Web-based survey questionnaire was assembled, based on previously reported instruments for measuring user satisfaction, usability, and user-based design. Three hundred and fifty-nine respondents used the questionnaire to rate a collection of 20 popular commercial Web sites.Data collected were analyzed to test four hypotheses on the relationships among the attributes examined. The Web site attributes were also plotted on bi-dimensional perceptual maps in order to visualize their interactions. The two techniques yielded the same result, namely that trading sites are the lowest rated and that online shopping and customer self-service sites should serve as models for Web site developers. These findings are especially useful for designers of electronic commerce (EC) Web sites and can aid in the development and maintenance phases of Web site creation.     

Cue consistency and page value perception: Implications for web-based catalog design

The web-based product catalog is a central element of online retailing. Although the extant research has studied the effect of design elements, such as product presentation, recommendation agents, and image and text on consumer choice, little is known about how Internet vendors could distribute products in a multi-page online product catalog for better performance. It is well-known that the first page of an online product catalog is particularly important to a vendor. Based on price signaling literature and cue consistency theory, this study investigates how price and product popularity cues could be carefully designed for the first page to achieve better sale performance. This study suggests there is a delicate balance point where price cues and popularity cues can achieve consistency and synergy and lead to better page value perceptions for the first page. The boosted page value perceptions, in turn, lead to better sales from the first page. This study extends the theory of cue consistency to the product group level.     

考虑绿色网络效应的再制造产品最优生产决策及产品之间的竞争

提出由两个再制造商组成的环保质量和价格竞争的双寡头博弈模型.在一个再制造市场中,同时考虑消费者环保意识以及包括污染税和回收补贴在内的政府财政政策的情况下,探讨绿色网络效应对生产决策的影响,以期使企业的利润最大化.数值实验表明:高质量(低质量)产品的绿色网络效应系数越高(低),可能会反常地减少(增加)两种产品的环保质量和价格,但会促进(削弱)高质量(低质量)产品的销售和利润,而产品产异性不受影响;此外,相比较没有外部网络性的情况,在绿色网络效应的影响下,回收补贴的增加使得高质量(低质量)产品的需求和利润都得到了一定改善(削弱).结果表明,在最优化条件下,监管者总是可以使企业利润和消费者剩余构成的"经济盈余"最大化,并使排放总量最小化.     

Price competition in e-tailing under service and recognition differentiation

The Internet has significantly increased the bargaining power of consumers. Many online shopping search engines allow consumers to find most retailers that sell a specific product, compare product prices, and review detailed store ratings. With competition just a click away, online retailers have little control over where consumers would shop. Offering the lowest price alone does not always guarantee that consumers will come and buy at your site. Other non-price attributes, such as service quality and a merchant’s brand recognition, also play important roles in helping online retailers to build competitive advantages. In this paper, we present a model of price competition that assumes e-tailers can mainly differentiate themselves by providing different levels of service and by establishing a different online recognition. Closed-form equilibrium solutions are obtained for the different scenarios that may arise in this model. Based on such solutions, we give managerial insights on how e-tailers should position themselves when parameters such as service cost, service levels, and recognition are varied.     

Improving the quality of online presence through interactivity

Online interactivity is becoming a valuable way of improving the communication quality of business web sites. As a result, it is important that web site designers understand the concept and how it affects the quality of web site design. This study empirically validated Ha and James’ five interactivity dimensions (playfulness, connectedness, reciprocal communication, information collection, and choice) and their relationship to design quality. The findings suggested that the playfulness, connectedness, and reciprocal communication dimensions are important predictors of web site quality. While information collection tools are powerful for web engineering and user tracking, the companies surveyed here had not fully used the promising potential of such tools. The choice dimension, although it offered flexibility and customizability to users, was not significant in predicting web site quality. The results underscored the viability of interactivity dimensions in the online environment.     

Improving the quality of online presence through interactivity

Online interactivity is becoming a valuable way of improving the communication quality of business web sites. As a result, it is important that web site designers understand the concept and how it affects the quality of web site design. This study empirically validated Ha and James’ five interactivity dimensions (playfulness, connectedness, reciprocal communication, information collection, and choice) and their relationship to design quality. The findings suggested that the playfulness, connectedness, and reciprocal communication dimensions are important predictors of web site quality. While information collection tools are powerful for web engineering and user tracking, the companies surveyed here had not fully used the promising potential of such tools. The choice dimension, although it offered flexibility and customizability to users, was not significant in predicting web site quality. The results underscored the viability of interactivity dimensions in the online environment.