Rosiwarna Anwar, Imam Salehudin, Basuki Muhammad Mukhlish, K. Ririh
Purpose: The objective of this study is to explore and to examine supportive factors of Mass Rapid Transport (MRT) implementation in Jakarta, Indonesia. At this stage of development, resistance to the implementation of MRT is the main barrier factor to MRT’s development. Therefore, successful implementation requires proper understanding of which factor is strongly influential to the acceptance of this technology. Design/methodology/approach: The population of this study is commuters along the North to South route of Jakarta MRT development site. The survey was conducted in thirteen location along the route based on the Station Development Plan. We collected 400 responses using purposive sampling method, half are private transportation users (cars and motorcycles) and the other half is public transportation users (bus and train). We obtained only 392 valid data after the validation and verification process. This study used Factor Analysis (FA) to test the construct validity of the measurement instrument and Path Analysis (PA) to identify significant structural paths between variables.Findings: We found that only Attitude and Perceived Usefulness significantly predict Intention to Adopt MRT for private vehicle users, while only Attitude and Subjective Norms significantly predict Intention to Adopt MRT for public transportation users. We found that both Overall Monthly Transport Expenditure and Intention to Adopt have significant influence to the Willingness to Pay of current users of private transportation. While for current users of public transportations, no predictor is significant for their Willingness to Pay. Research limitations/implications: This research used non-probabilistic sampling method; therefore generalization to population is strictly limited. Nevertheless, our findings may be applied to groups with similar context and characteristics with our sample group. Another limitation is the cross sectional nature of this study restricts our findings to specific economic assumption. One such assumption is the fuel price in Jakarta, Indonesia which has fluctuated considerably since the study was conducted in late 2014.Practical implications: Our finding is useful to be considered as additional information for the future pricing decision of MRT Jakarta. Additionally, the study may be used to improve MRT service based on the priorities mentioned in the data. For example, “Saving Time” is considered a most important trait of consumers’ perception on the Usefulness of MRT. Originality/value: This study applies Technology Acceptance Model to the “Intention to Adopt” and “Willingness to Pay” future MRT program in Jakarta, Indonesia.
{"title":"Intention to Adopt and Willingness to Pay: Mass Rapid Transport System in Greater Jakarta, Indonesia","authors":"Rosiwarna Anwar, Imam Salehudin, Basuki Muhammad Mukhlish, K. Ririh","doi":"10.21002/amj.v9i2.9146","DOIUrl":"https://doi.org/10.21002/amj.v9i2.9146","url":null,"abstract":"Purpose: The objective of this study is to explore and to examine supportive factors of Mass Rapid Transport (MRT) implementation in Jakarta, Indonesia. At this stage of development, resistance to the implementation of MRT is the main barrier factor to MRT’s development. Therefore, successful implementation requires proper understanding of which factor is strongly influential to the acceptance of this technology. Design/methodology/approach: The population of this study is commuters along the North to South route of Jakarta MRT development site. The survey was conducted in thirteen location along the route based on the Station Development Plan. We collected 400 responses using purposive sampling method, half are private transportation users (cars and motorcycles) and the other half is public transportation users (bus and train). We obtained only 392 valid data after the validation and verification process. This study used Factor Analysis (FA) to test the construct validity of the measurement instrument and Path Analysis (PA) to identify significant structural paths between variables.Findings: We found that only Attitude and Perceived Usefulness significantly predict Intention to Adopt MRT for private vehicle users, while only Attitude and Subjective Norms significantly predict Intention to Adopt MRT for public transportation users. We found that both Overall Monthly Transport Expenditure and Intention to Adopt have significant influence to the Willingness to Pay of current users of private transportation. While for current users of public transportations, no predictor is significant for their Willingness to Pay. Research limitations/implications: This research used non-probabilistic sampling method; therefore generalization to population is strictly limited. Nevertheless, our findings may be applied to groups with similar context and characteristics with our sample group. Another limitation is the cross sectional nature of this study restricts our findings to specific economic assumption. One such assumption is the fuel price in Jakarta, Indonesia which has fluctuated considerably since the study was conducted in late 2014.Practical implications: Our finding is useful to be considered as additional information for the future pricing decision of MRT Jakarta. Additionally, the study may be used to improve MRT service based on the priorities mentioned in the data. For example, “Saving Time” is considered a most important trait of consumers’ perception on the Usefulness of MRT. Originality/value: This study applies Technology Acceptance Model to the “Intention to Adopt” and “Willingness to Pay” future MRT program in Jakarta, Indonesia.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"23 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-10-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"126873247","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Three studies explored the effects of uncertainty on people’s time preferences for financial gains and losses. In general, individuals seek to avoid uncertainty in situations of intertemporal choice. While holding the expected value of payouts constant, participants preferred immediate gains and losses if the future was uncertain, and preferred future gains and losses if the present was uncertain. This pattern of preferences is incompatible with current models of intertemporal choice, in which people should consistently prefer to have gains now and losses later. This pattern of uncertainty avoidance is also not explained by prospect theory models, which predict risk seeking for losses. We discuss these findings in relation to previous literature. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2349. This paper was accepted by Yuval Rottenstreich, judgment and decision making.
{"title":"Intertemporal Uncertainty Avoidance: When the Future is Uncertain, People Prefer the Present, and When the Present is Uncertain, People Prefer the Future","authors":"David J. Hardisty, J. Pfeffer","doi":"10.2139/ssrn.2656662","DOIUrl":"https://doi.org/10.2139/ssrn.2656662","url":null,"abstract":"Three studies explored the effects of uncertainty on people’s time preferences for financial gains and losses. In general, individuals seek to avoid uncertainty in situations of intertemporal choice. While holding the expected value of payouts constant, participants preferred immediate gains and losses if the future was uncertain, and preferred future gains and losses if the present was uncertain. This pattern of preferences is incompatible with current models of intertemporal choice, in which people should consistently prefer to have gains now and losses later. This pattern of uncertainty avoidance is also not explained by prospect theory models, which predict risk seeking for losses. We discuss these findings in relation to previous literature. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2015.2349. This paper was accepted by Yuval Rottenstreich, judgment and decision making.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"61 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-09-05","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115234870","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
M. Steiner, Nico Wiegand, Andreas Eggert, K. Backhaus
Platform-based systems have become the dominant way to market consumer entertainment products. Video games are, for instance, distributed in digital data form, which can only be used on compatible hardware. Network effects drive the diffusion of such systems. This article provides insights into market heterogeneity and the role that expectations of the direct and indirect network effects plays in the game console market. The results of two empirical studies suggest that the console market is strongly fragmented and that the perceptions of network effects differ between the various target segments. The same holds for the importance of consumer expectations: For instance, hardcore gamers make predictions about the future software availability and incorporate these into their current adoption decision, while social gamers care more about the expected potential to interact with others. When introducing novel technologies, platform sponsors can benefit from improved targeting by, for example, providing software selectively, instead of large varieties early on. This study identifies the limits of go-to-market strategies derived from aggregate analyses when dealing with network effects and shows that behavioristic insights should complement them.
{"title":"Platform Adoption in System Markets: The Roles of Preference Heterogeneity and Consumer Expectations","authors":"M. Steiner, Nico Wiegand, Andreas Eggert, K. Backhaus","doi":"10.2139/ssrn.2609402","DOIUrl":"https://doi.org/10.2139/ssrn.2609402","url":null,"abstract":"Platform-based systems have become the dominant way to market consumer entertainment products. Video games are, for instance, distributed in digital data form, which can only be used on compatible hardware. Network effects drive the diffusion of such systems. This article provides insights into market heterogeneity and the role that expectations of the direct and indirect network effects plays in the game console market. The results of two empirical studies suggest that the console market is strongly fragmented and that the perceptions of network effects differ between the various target segments. The same holds for the importance of consumer expectations: For instance, hardcore gamers make predictions about the future software availability and incorporate these into their current adoption decision, while social gamers care more about the expected potential to interact with others. When introducing novel technologies, platform sponsors can benefit from improved targeting by, for example, providing software selectively, instead of large varieties early on. This study identifies the limits of go-to-market strategies derived from aggregate analyses when dealing with network effects and shows that behavioristic insights should complement them.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"34 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-05-22","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"122232200","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
The opening of borders and the globalization have facilitated the transition of expatriate employees in the tourism field. The appearance of this phenomenon has spawned several consequences such as changing the level of perceived service quality; it has influenced also the perceived image of the tourist destination. Since the choice of destination is large, this needs more focus on factors that can influence it. The objective of this paper is to propose an appropriate model, presenting the effects of culture expatriates on the choice of the destination. Based on a quantitative survey of 400 Internet users; our results show that the culture of expatriates influences the destination’s perceived image.
{"title":"The Effects of Culture on Expatriates' Perceived Image of the Tourism Destination","authors":"T. Abdellatif, R. Amina, Asma Baazaoui","doi":"10.2139/ssrn.2599956","DOIUrl":"https://doi.org/10.2139/ssrn.2599956","url":null,"abstract":"The opening of borders and the globalization have facilitated the transition of expatriate employees in the tourism field. The appearance of this phenomenon has spawned several consequences such as changing the level of perceived service quality; it has influenced also the perceived image of the tourist destination. Since the choice of destination is large, this needs more focus on factors that can influence it. The objective of this paper is to propose an appropriate model, presenting the effects of culture expatriates on the choice of the destination. Based on a quantitative survey of 400 Internet users; our results show that the culture of expatriates influences the destination’s perceived image.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"39 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-28","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131060141","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Peer-to-peer (P2P) accommodation rentals continue to grow at a phenomenal rate. Examining how this business model affects the competitive landscape of accommodation services is of strategic importance to hotels and tourism destinations. This study explores the competitive edge of P2P accommodation in comparison to hotels by extracting key content and themes from online reviews to explain the key service attributes sought by guests. The results from text analytics using terminology extraction and word co-occurrence networks indicate that even though guests expect similar core services such as clean rooms and comfortable beds, different attributes support the competitive advantage of hotels and P2P rentals. While conveniences offered by hotels are unparalleled by P2P accommodation, the latter appeal to consumers driven by experiential and social motivations. Managerial implications for hotels and P2P accommodation are provided.
{"title":"Hotels vs. Peer-to-Peer Accommodation Rentals: Text Analytics of Consumer Reviews in Portland, Oregon","authors":"Iis P. Tussyadiah, F. Zach","doi":"10.2139/ssrn.2594985","DOIUrl":"https://doi.org/10.2139/ssrn.2594985","url":null,"abstract":"Peer-to-peer (P2P) accommodation rentals continue to grow at a phenomenal rate. Examining how this business model affects the competitive landscape of accommodation services is of strategic importance to hotels and tourism destinations. This study explores the competitive edge of P2P accommodation in comparison to hotels by extracting key content and themes from online reviews to explain the key service attributes sought by guests. The results from text analytics using terminology extraction and word co-occurrence networks indicate that even though guests expect similar core services such as clean rooms and comfortable beds, different attributes support the competitive advantage of hotels and P2P rentals. While conveniences offered by hotels are unparalleled by P2P accommodation, the latter appeal to consumers driven by experiential and social motivations. Managerial implications for hotels and P2P accommodation are provided.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"124 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117123701","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
G. McClelland, John G. Lynch, J. Irwin, Stephen A. Spiller, G. Fitzsimons
Considerable prior statistical work has criticized replacing a continuously measured variable in a general linear model with a dichotomy based on a median split of that variable. Iacobucci, Posovac, Kardes, Schneider, and Popovich (this issue) defend the practice of “median splits�? using both conceptual arguments and simulations. We show that both their conceptual arguments and their simulations range from incomplete to incorrect. There are no real benefits to median splits, and there are real costs in increases in Type II errors through loss of power and increases in Type I errors through false positive consumer psychology. Median splits remain a bad idea.
{"title":"Median Splits, Type II Errors, and False Positive Consumer Psychology: Don't Fight the Power","authors":"G. McClelland, John G. Lynch, J. Irwin, Stephen A. Spiller, G. Fitzsimons","doi":"10.2139/ssrn.2580320","DOIUrl":"https://doi.org/10.2139/ssrn.2580320","url":null,"abstract":"Considerable prior statistical work has criticized replacing a continuously measured variable in a general linear model with a dichotomy based on a median split of that variable. Iacobucci, Posovac, Kardes, Schneider, and Popovich (this issue) defend the practice of “median splits�? using both conceptual arguments and simulations. We show that both their conceptual arguments and their simulations range from incomplete to incorrect. There are no real benefits to median splits, and there are real costs in increases in Type II errors through loss of power and increases in Type I errors through false positive consumer psychology. Median splits remain a bad idea.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"43 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-04-09","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115302510","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Controversy over public health policies targeting carbonated soft drinks has catalyzed cross-disciplinary debate. Though beverage demand is characterized by purchases from multiple categories per trip, existing research using soda data predominantly employs discrete choice models, which restrict consumers to single unit choices. This paper instead combines a multiple-choice utility function with a hierarchical Bayesian model to estimate household-level preferences across beverages. I find that households in less healthy counties (as measured by mean body mass index) consume more regular soda per capita, have stronger preferences, and are less price sensitive than households in more healthy counties, suggesting that soda tax proposals should be county-specific. Because market players possess varying degrees of market power, I also study soda tax incidence. Simulations of equilibrium prices in various tax scenarios demonstrate that the assumption of 100% pass-through to prices, ubiquitous in soda tax research, underestimates the true change in prices, further underscoring the need for a county-level approach. Calculations then reveal that most of a counterfactual tax-induced shift in consumption is due to an income effect and low cross-price elasticities, so that while city governments are unlikely to raise enough revenue to cover the healthcare costs related to soda consumption, the downstream health benefits induced by a soda tax compensate most households for the reduction in utility.
{"title":"The Incidence of a Soda Tax, in Pennies and Pounds","authors":"Avigail Kifer","doi":"10.2139/ssrn.2533074","DOIUrl":"https://doi.org/10.2139/ssrn.2533074","url":null,"abstract":"Controversy over public health policies targeting carbonated soft drinks has catalyzed cross-disciplinary debate. Though beverage demand is characterized by purchases from multiple categories per trip, existing research using soda data predominantly employs discrete choice models, which restrict consumers to single unit choices. This paper instead combines a multiple-choice utility function with a hierarchical Bayesian model to estimate household-level preferences across beverages. I find that households in less healthy counties (as measured by mean body mass index) consume more regular soda per capita, have stronger preferences, and are less price sensitive than households in more healthy counties, suggesting that soda tax proposals should be county-specific. Because market players possess varying degrees of market power, I also study soda tax incidence. Simulations of equilibrium prices in various tax scenarios demonstrate that the assumption of 100% pass-through to prices, ubiquitous in soda tax research, underestimates the true change in prices, further underscoring the need for a county-level approach. Calculations then reveal that most of a counterfactual tax-induced shift in consumption is due to an income effect and low cross-price elasticities, so that while city governments are unlikely to raise enough revenue to cover the healthcare costs related to soda consumption, the downstream health benefits induced by a soda tax compensate most households for the reduction in utility.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"96 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2015-01-29","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116880939","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Pub Date : 2014-12-31DOI: 10.15388/OMEE.2014.5.2.14236
V. Dikčius, Anahit Armenakyan, S. Urbonavičius, Gintare Jonyniene, Justina Gineikienė
In the context of marketing, children are considered to be increasingly important influencers of parents’ purchasing decisions. However, their influence varies depending on the products and cultures, and many particularities of this phenomenon remain under-researched. This is especially true in regard to the countries that are categorized as “emerging economies”. Some of them still do not have reliable measurements of their cultural dimensions, and this increases difficulties in performing comparative analysis there. On the other hand, these countries offer a broad and important scene for child influence studies.This study concentrates on analysis and comparisons of children’s influence on parental purchase decision-making in Lithuania and Azerbaijan. These countries are different in, at least, two Hofstede’s cultural dimensions that are important in family decision-making: individualism and uncertainty avoidance. Also, the study contributes to the existing research by using a product use-related categorization of product groups.Such an approach reveals significant difference in terms of how children exert their influence on purchasing services versus tangible products for the family use. Interesting differences between the countries in terms of children’s influence on purchasing products for their personal use also opens a new scene for future studies that might consider a similar product categorization approach.
{"title":"The Influence of Children on Family Purchasing in Lithuania and Azerbaijan","authors":"V. Dikčius, Anahit Armenakyan, S. Urbonavičius, Gintare Jonyniene, Justina Gineikienė","doi":"10.15388/OMEE.2014.5.2.14236","DOIUrl":"https://doi.org/10.15388/OMEE.2014.5.2.14236","url":null,"abstract":"In the context of marketing, children are considered to be increasingly important influencers of parents’ purchasing decisions. However, their influence varies depending on the products and cultures, and many particularities of this phenomenon remain under-researched. This is especially true in regard to the countries that are categorized as “emerging economies”. Some of them still do not have reliable measurements of their cultural dimensions, and this increases difficulties in performing comparative analysis there. On the other hand, these countries offer a broad and important scene for child influence studies.This study concentrates on analysis and comparisons of children’s influence on parental purchase decision-making in Lithuania and Azerbaijan. These countries are different in, at least, two Hofstede’s cultural dimensions that are important in family decision-making: individualism and uncertainty avoidance. Also, the study contributes to the existing research by using a product use-related categorization of product groups.Such an approach reveals significant difference in terms of how children exert their influence on purchasing services versus tangible products for the family use. Interesting differences between the countries in terms of children’s influence on purchasing products for their personal use also opens a new scene for future studies that might consider a similar product categorization approach.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-31","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123849504","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some consumers favor the best of the comparable offers vs. non-comparable offers. We vary the number of such consumers as well as the strength of their preferences for the best of the comparable offers. In treatments where firms observe the past decisions of their competitors, firms learn not to present comparable offers especially when many consumers prefer comparable offers. This occurs after initial periods with strong competition and leads to lower welfare for all consumers. In treatments where firms cannot monitor the competition, firms end up having to present comparable offers, which leads to an improvement in welfare for all consumers.
{"title":"Choosing Whether to Compete: Price and Format Competition with Consumer Confusion","authors":"Paolo Crosetto, Alexia Gaudeul","doi":"10.2139/ssrn.2519000","DOIUrl":"https://doi.org/10.2139/ssrn.2519000","url":null,"abstract":"We run a market experiment where firms can choose not only their price but also whether to present comparable offers. They are faced with artificial demand from consumers who make mistakes when assessing the net value of products on the market. If some offers are comparable however, some consumers favor the best of the comparable offers vs. non-comparable offers. We vary the number of such consumers as well as the strength of their preferences for the best of the comparable offers. In treatments where firms observe the past decisions of their competitors, firms learn not to present comparable offers especially when many consumers prefer comparable offers. This occurs after initial periods with strong competition and leads to lower welfare for all consumers. In treatments where firms cannot monitor the competition, firms end up having to present comparable offers, which leads to an improvement in welfare for all consumers.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"84 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"128274323","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Networks and the embedded relationships are critical determinants of how people communicate and form beliefs. The explosion of social media has significantly increased the scope and impact of social learning among consumers. This paper studies observational learning in networks of friends versus strangers. A consumer decides whether to adopt a product after receiving a private signal about product quality and observing the actions of others. The preference for the product has greater heterogeneity in the stranger-network than in the friend-network. We show that when the network is small, observing friends' actions helps the consumer make more accurate inferences about quality. As the network grows, however, the stranger-network becomes more effective. Underlying these results are two competing effects of network heterogeneity on social learning. These are the individual preference effect, which allows one to make a better quality judgment when the preference element of past actions is more certain, and the social conforming effect, wherein private signals are underused in quality judgment as people follow others' actions. We find cascading is more likely to occur in the friend-network than in the stranger-network. For a high-quality firm, the stranger-network generates greater sales than the friend-network when the network size is sufficiently large or the private signal is sufficiently accurate. We also examine the existence of experts and firms using advertising to influence consumers. Finally, we show how networks that are highly homogeneous or heterogeneous could impede observational learning.
{"title":"Social Learning in Networks of Friends versus Strangers","authors":"Jurui Zhang, Yong Liu, Yubo Chen","doi":"10.1287/mksc.2015.0902","DOIUrl":"https://doi.org/10.1287/mksc.2015.0902","url":null,"abstract":"Networks and the embedded relationships are critical determinants of how people communicate and form beliefs. The explosion of social media has significantly increased the scope and impact of social learning among consumers. This paper studies observational learning in networks of friends versus strangers. A consumer decides whether to adopt a product after receiving a private signal about product quality and observing the actions of others. The preference for the product has greater heterogeneity in the stranger-network than in the friend-network. We show that when the network is small, observing friends' actions helps the consumer make more accurate inferences about quality. As the network grows, however, the stranger-network becomes more effective. Underlying these results are two competing effects of network heterogeneity on social learning. These are the individual preference effect, which allows one to make a better quality judgment when the preference element of past actions is more certain, and the social conforming effect, wherein private signals are underused in quality judgment as people follow others' actions. We find cascading is more likely to occur in the friend-network than in the stranger-network. For a high-quality firm, the stranger-network generates greater sales than the friend-network when the network size is sufficiently large or the private signal is sufficiently accurate. We also examine the existence of experts and firms using advertising to influence consumers. Finally, we show how networks that are highly homogeneous or heterogeneous could impede observational learning.","PeriodicalId":443127,"journal":{"name":"Behavioral Marketing eJournal","volume":"18 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2014-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124909883","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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