Location

260-055, Owen G. Glenn Building

Start Date

12-15-2014

Description

Recent advances in IT have provided firms unprecedented ability to manage online social interactions. Despite growing popularity, few studies have examined firm's optimal design choices in firm-mediated social interactions. We examine whether and how a firm can enhance effectiveness of online social interactions, by simply varying message shared by referrers. We focus on two pieces of information in message – information of sender’s purchase status and information about existence of referral rewards – and their impacts on recipient’s purchase. Collaborating with an online deal platform, we conduct a randomized field experiment testing effectiveness of different firm-mediated messages. We find that 1) information of sender’s purchase leads to more purchases from recipients; such effect is larger for products with strong uncertainty and network effect; 2) the incremental effect of Referral Rewards information crucially depends on the nature of product.The findings will guide optimal message design at aggregate and individual level

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Dec 15th, 12:00 AM

Understanding the Effects of Message Design on Firm-Mediated Online Social Interactions: A Randomized Field Experiment

260-055, Owen G. Glenn Building

Recent advances in IT have provided firms unprecedented ability to manage online social interactions. Despite growing popularity, few studies have examined firm's optimal design choices in firm-mediated social interactions. We examine whether and how a firm can enhance effectiveness of online social interactions, by simply varying message shared by referrers. We focus on two pieces of information in message – information of sender’s purchase status and information about existence of referral rewards – and their impacts on recipient’s purchase. Collaborating with an online deal platform, we conduct a randomized field experiment testing effectiveness of different firm-mediated messages. We find that 1) information of sender’s purchase leads to more purchases from recipients; such effect is larger for products with strong uncertainty and network effect; 2) the incremental effect of Referral Rewards information crucially depends on the nature of product.The findings will guide optimal message design at aggregate and individual level