A model of consumer information search and online network externalities

This article looks at a consumer who faces a choice between two sources of information: conventional and online. The online source is different from the conventional one because consumers care about how many people are using it along with them. Generally, the more users the better (positive network externality), but, on the other hand, the presence of more users implies a reduction of available capacity, about which consumers also care. We assume that consumers maximize their utility, which is modeled as a function of all other consumption, knowledge, and network externalities. Knowledge is conceptualized as a function of the amount of information spent both on the online network and on conventional sources. Since consumer information searches may differ according to demographic differences, this may result in consumers’ differences in their usage of online networks and conventional sources. We include these externalities in our model to better understand consumer choice behavior for the online network. The consumer utility function is estimated by using the model estimation method developed in this article, since the interactions implied by the consumer utility function are more complex than one could hope to estimate econometrically. We use survey data to regress the demand for online information depending on income, education, the number of users, and remaining capacity. We introduce a methodology to simulate how consumers’ representative utilities will behave in different network environments and derive implications for online network suppliers.     

A comparison of online and offline consumer behaviour: An empirical study on a cinema shopping context

The main objective of this study is to analyse online vs. offline differences in consumer behaviour. To this end, through a proposal applied to cinemas in shopping centres, this study considers values and lifestyles as major factors that influence behaviours and intentions. The partial least squares (PLS) approach is used to evaluate the model. A multi-group analysis is conducted to compare consumers who buy tickets online with those who do so at a box office. We consider 391 valid cases. The results obtained show a link between the use of technology and its effects on behaviour. The relationships between values and behaviour as well as between behaviour and future intent are stronger among online consumers than the effects of lifestyles on behaviour. We consider relevant theoretical and empirical perspectives and offer critical recommendations of use to shopping centre managers, movie theatres, and intermediaries of this sector.     

How managerial responses to online reviews affect customer satisfaction: An empirical study based on additional reviews

This study investigates the internality of managerial responses (MRs) to online reviews on the responded customers' (i.e., customers who have posted an initial review and then being responded by the company through an MR) satisfaction. By utilizing the data of additional reviews (ARs), an innovative social media module for customers to express follow-up opinions that complement their initial reviews, we examine the impact of MR treatment on the customers' AR valence. We leverage the insight that the observability of MR at the time of the responded customer posts an AR is a crucial condition to the impact of the MR, and thus regard the observability of MR as an exogenous treatment for model identification. Fixed effects models with extensive control variables are proposed to estimate the MR treatment effects. The results show that MRs have significant positive impacts on customers' satisfaction in ARs. Further explorations show that the positive impacts are mainly due to the positive effects of MRs on nonpositive initial reviews (MR-Ns), suggesting that MR-Ns are an effective management tool for customer complaints. Moreover, this study identifies MR delay as a boundary condition for the internality of MRs because MR delay negatively moderates the positive impacts of MRs. Therefore, companies should promptly respond to customers' negative opinions in their reviews. This study is among the very first to clearly identify the internality of MRs on the responded customers’ satisfaction. We show that the existing results on the externality of MRs are not directly applicable to the internality of MRs, highlighting the novelty of this study. The obtained new insights provide practical guidelines for companies to adjust their intervention strategies on e-commerce platforms.     

How online reviews and coupons affect sales and pricing: An empirical study based on e-commerce platform

With rapid economic growth largely fueled by digital technologies, online reviews are among the new wave of technologies that still make a significant contribution to this new digital economy. However, there is scarce academic research in promoting or responding online reviews using reduction coupons with threshold issued by sellers and pricing decisions. We employ a three-stage least squares (3SLS) model to estimate the effects of online reviews and coupons on online product sales and price. We also extend our research using the data of two product categories. Our results mainly include: (1) Negative impact of negative online reviews on sales is moderated by price, and consumers are more tolerant of negative reviews of high-priced products. (2) Consumers' perceived usefulness of online coupons helps promote more sales and weaken the relationship between negative reviews and sales. (3) Positive online reviews weaken the negative relationship between online negative reviews and the price of product. (4) Consumers’ increased perceived usefulness of online coupons will encourage sellers to set a higher price and weaken the negative relationship between negative reviews and the price of product. (5) Compared with the search product, sellers regard negative reviews from the product with experience attributes as less helpful and apply less effective coupon promotion to response to negative reviews. Our study clarifies the interaction between online reviews and online coupons on e-commerce platforms under the operation scenario. We also provide empirical support for accurate promotion and higher sales revenue through reasonable pricing decisions and specified reduction coupons.     

An empirical study on the effects of an enterprise fan page

Most major enterprises have invested in social networking to provide services, promote products, or communicate with customers. However, to date, no clear understanding on the effects of social networks on business performance has emerged. This study examines the relationship between the capability of the enterprise to manage social networks and the resultant benefits of their investing in the social network. A fan page on Facebook is the selected target of study. By analyzing the effort required to manage a fan page, we measured the fan-page managing capability by its number of fans. Then, we proposed six hypotheses for empirical examination of the causal relationship between enterprises’ social network managing capability and business benefits. The study applied two-stage data collection and testing. The first stage is to build a general understanding of the relationship between the number of fans and business revenue. Based on findings of the first stage, the study tested the hypotheses on selected global firms and sought patterns of benefits generated from the fan page. This study builds deep understanding from various aspects about fan-page effects on enterprises, and proposes that firms that provide products and services with characteristics of low-product price, short-product durability, and low-customer involvement are empirically influenced by the management of their fan pages.     

Advertising-versus-marketing mix carryover effects: An empirical evaluation

This article examines whether market-share-carryover effects can be primarily attributed to advertising or whether other marketing-mix variables play an important role in describing such lagged effects.Eight different lag specifications including implicit, explicit, and mixed-effect models were tested using data representing 15 brands in three New Zealand consumer-goods markets.The results show that for the majority of brands examined, lagged advertising is more significant that the sustained influence of price and distribution. This result is explained in terms of the relative maturity of the product classes studied.     

Leveraging the co-evolution of offline and online video games: an empirical study

Considerable research has been carried out on online shopping and the implications of this purchasing format for consumers and retailers. Most of these studies have focused on consumer attitudes towards online shopping, and how these can be useful predictors of online shopping adoption. Notwithstanding these insights from adoption theory, existing research has yet to distil the most effective means of understanding consumers’ attitudes towards online video game purchases. Based on a qualitative study, our study contributes to literature on adoption theory by presenting some explanations involving online video games purchases by identifying salient perceptions of online and offline motivations and advances ideas on the facilitating role of incentives in making purchase decisions.     

An empirical analysis of online shopping adoption in Beijing,China

The Internet is a global communication medium that is increasingly being used worldwide as an innovative tool for marketing goods and services. At the end of 2010, Internet users in China reached 420 million. However, online shopping in China is not widely practiced and organisations investing in B2C online shopping need to understand the factors that affect Chinese consumers′ online buying behaviour. This research develops a theoretical research model as a framework to identify the key decision factors influencing Chinese consumers′ to shop, or not to shop online. A self-administered questionnaire was used to gather information from 435 respondents in Beijing, China. The empirical analysis identifies and ranks seven important decision factors: perceived risk, consumer resources, service quality, subjective norms, product variety, convenience, and website factors. All of these decision factors impact on Chinese consumers′ adoption of online shopping. Moreover, managerial implications and recommendations are also presented.     

Pricing risky corporate bonds: An empirical study

This paper empirically studies a model for pricing risky corporate bonds proposed by Baaquie—based on the seminal Merton. The proposed model provides an exact solution for the price of a risky corporate bond with a finite maturity and explains the market price of corporate fixed coupon bonds as being the result of the market risk that is carried by the bond. Baaquie's model is empirically tested using 42 fixed coupon bonds issued by 23 US corporations, between 2011 and 2017. It is found that the proposed model estimates most bond prices quite accurately. Market time (similar to the concept of psychological time), which is distinct from calendar time, is quantified in the paper and is an exogenous behavioral parameter that plays a pivotal role in improving the accuracy of the pricing model for long-maturity risky bonds.     

One Vs. Many: who wins? An empirical investigation of online product display

ABSTRACT

This study questions the unharmonious ways of product displays in online grocery retailing and aims to find if visual complexity of the product display has any impact on behavioral outcomes of online grocery shoppers. Our main finding was that visually complex images, i.e. images with a high number of elements have a negative effect on affective and cognitive states resulting in decreased behavioral intentions. However, when the number of elements in the product display was decreased, i.e. the visual complexity of the product display was reduced, shoppers’ cognitive and affective responses and intentions were similar to when they were exposed to noncomplex images. We also found that arousal and pleasure (parallel mediators) absorption, telepresence, utilitarian and hedonic values and perceived ease of use (serial mediators) mediate the effect that the product display has on behavioral intentions.     

An empirical study of ethical predispositions

Using a two-part instrument consisting of eight vignettes and twenty character traits, the study sampled 141 employees of a mid-west financial firm regarding their predispositions to prefer utilitarian or formalist forms of ethical reasoning. In contrast with earlier studies, we found that these respondents did not prefer utilitarian reasoning. Several other hypotheses were tested involving the relationship between (1) people's preferences for certain types of solutions to issues and (2) the forms of reasoning they use to arrive at those solutions; the nature of the relationship between utilitarian and formalist categories; and the possibility of measuring ethical predispositions using different methods. F. Neil Brady is Professor of Public Management and Associate Director for the Center for the Study of Values in Organizations in the Marriott School of Management at Brigham Young University. He is the author of Ethical Managing: Rules and Resultsand has published numerous articles on business ethics, ethical theory, and moral reasoning.Gloria E. Wheeler is Associate Professor of Public Management and Associate Director of the Institute of Public Management at Brigham Young University. Her primary areas are research methodology and human resource management. She has extensive survey research experience in many substantive fields and has published articles in journals covering such diverse areas as taxation, teaching, marketing, and human behavior in organizations.     

Addictive buying in West Germany: An empirical study

Subsequent to a previous article in JCP (Scherhorn, 1990) outlining a theoretical approach to addictive buying, the authors report on the results of their empirical study of addictive buyers in West Germany. The study indicates that addictive buying is clearly one kind of addiction which may be substituted by other addictions, may take the place of another addiction, or even alternate with other forms of addiction. At the same time, there is substantial evidence that there are special key experiences to which the propensity to addictive buying can be traced. Addictive buyers have been subjected to a specific form of distortion of autonomy: They have felt that for parents, relatives, or neighbours, material goods (money, property, consumer goods) seemed to be more relevant and more important than they themselves. Thus, they have acquired a strong predisposition for using consumer goods as a favourite means of compensating for the lack of self-esteem from which they suffer. This predisposition, however, is reinforced by the fact that consumption and buying increasingly take on the role of a socially favoured means of compensation.     

The differential effects of retail density: An investigation of goods versus service settings

Two studies investigate the impact of retail density and time pressure on shoppers' store attitudes and behavioral intentions. In a goods setting, experiment 1 results show a curvilinear pattern as the level of retail density increases. That is, individuals prefer a medium level of crowding to a store with low or high crowding. This inverted-U shaped crowding effect has not previously been tested in the retailing literature. Experiment 2 employs a service setting, where the relationship between retail crowding and outcome variables is found to be linear rather than curvilinear, except under conditions of time pressure. In contrast to the goods setting, individuals have more favorable attitudes and expect to pay more for a service as the level of crowding increases. Thus, our study findings suggest that the optimal level of crowding depends on the type of retail setting.     

An empirical comparison of neural network and logistic regression models

The purpose of this paper is to critically compare a neural network technique with the established statistical technique of logistic regression for modeling decisions for several marketing situations. In our study, these two modeling techniques were compared using data collected on the decisions by supermarket buyers whether to add a new product to their shelves or not. Our analysis shows that although neural networks offer a possible alternative approach, they have both strengths and weaknesses that must be clearly understood.