Narrative Transportation and Paratextual Features of Social Media in Viral Advertising

This study establishes that the experience of narrative transportation has a positive influence on viral advertising. The relative strength of this relationship, however, depends on several boundary conditions associated with the paratextual features of social networking service (SNS) environments. Specifically, it is stronger if the senders and intended receivers have personal ties. Moreover, the influence of narrative transportation is negatively moderated by advertising disclosure that elicits persuasion knowledge. Finally, the negative effect of persuasion knowledge is reduced if the ad appears with a higher number of “likes,” which increases social proof for viral ads. Implications regarding viral advertising and social media behaviors are discussed.     

Entrepreneurial Financing and Costly Due Diligence

In the traditional solution to the adverse selection problem, entrepreneurs indirectly signal quality via security choice, typically debt. This paper models an alternative solution. The costly due diligence of venture capitalists directly reveals the quality of projects, thereby reducing information asymmetry. It is shown that this mechanism necessitates profit-sharing, a contractual feature usually associated in the literature with managerial agency costs rather than adverse selection.     

Evolutionary game analysis and regulatory strategies for online group-buying based on system dynamics

The emergence of online group-buying provides a new consumption pattern for consumers in e-commerce era. However, many consumers realize that their own interests sometimes can’t be guaranteed in the group-buying market due to the lack of being regulated. This paper aims to develop effective regulation strategies for online group-buying market. To the best of our knowledge, most existing studies assume that three parties in online group-buying market, i.e. the retailer, the group-buying platform and the consumer, are perfectly rational. To better understand the decision process, in this paper, we incorporate the concept of bounded rationality into consideration. Firstly, a three-parties evolutionary game model is established to study each player’s game strategy based on bounded rationality. Secondly, the game model is simulated as a whole by adopting system dynamics to analyze its stability. Finally, theoretical analysis and extensive computational experiments are conducted to obtain the managerial insights and regulation strategies for online group-buying market. Our results clearly demonstrate that a suitable bonus-penalty measure can promote the healthy development of online group-buying market.     

The impact of COVID-19 on consumer evaluation of authentic advertising messages

This study investigates the relationship between the COVID-19 threat and consumer evaluation of a product with authenticity appeals in advertisements. We propose that threatening situations like COVID-19 motivate consumers to lower their uncertainty and increase their preference for products with authentic advertising messages. Because individuals react differently to threatening environments according to their early-life experiences, commonly reflected in childhood socioeconomic status, we examined whether childhood socioeconomic status moderates the relationship between threat and consumer evaluation of authenticity in advertisements. First, secondary data from Google Trends provided empirical support for our predictions. In additional experimental studies, participants evaluated different target products in four studies that either manipulated (Studies 2 and 3) or measured (Studies 4 and 5) COVID-19 threat. Our results provide converging evidence that consumers positively evaluate products with authentic advertising messages under the COVID-19 threat. Consumers' motivation to lower their uncertainty underlies the effect of COVID-19 threat on their evaluation of authentic messages (Study 3). This attempt to reduce uncertainty is more likely to occur for consumers with relatively higher childhood socioeconomic status (Studies 4 and 5). These findings suggest that using authenticity appeals during a pandemic could effectively reduce consumers' perceived uncertainty and generate positive consumer evaluations.