The Consequences of Rating Inflation on Platforms: Evidence from a Quasi-Experiment

2023 | Information Systems Research | Citations: 0

Authors: Aziz, Arslan; Li, Hui; Telang, Rahul

Abstract: Informative online ratings enable digital platforms to reduce the search cost fo ... Expand

Abstract: Informative online ratings enable digital platforms to reduce the search cost for buyers to find good sellers. However, rating inflation, a phenomenon in which average rating increases and rating variance across listings decreases, threatens the informativeness of ratings. We empirically identify the consequences of rating inflation by conducting a quasi-experiment with a digital platform that exogenously changed its rating display rule in a treated neighborhood, which resulted in rating inflation. Using a differences-in-differences approach, we find that platforms benefit from one aspect of rating inflation: user purchases and seller sales increase because of the increased average rating. However, they also face negative consequences: rating inflation causes a decrease in user trial and a greater concentration of sales among popular restaurants. Overall, our results illustrate the potential consequences of rating inflation that platforms need to consider when designing and managing their rating system.History: Xiaoquan (Michael) Zhang, Senior Editor; Gordon Burtch, Associate Editor.Supplemental Material: The online appendices are available at https://doi.org/10.1287/isre.2022.1134. Collapse

Topics: digital platform mobile application word of mouth ease of use consumer behavior

Methods: experiment pilot experiment experimental group robustness check quasi experiment

Privacy Regulation and Its Unintended Consequence on Consumption Behaviors: Evidence From CCPA

2023 | International Conference on Information Systems | Citations: 0

Authors: Bae, Donghwa; Mayya, Raveesh; Nian, Tingting

Abstract: This study explores the unintended consequences of data protection regulations ... Expand

Abstract: This study explores the unintended consequences of data protection regulations on consumer behavior. Specifically, we examine the California Consumer Privacy Act, which restricts companies from collecting Californians' personal information. Privacy regulations may limit firms' ability to suggest products aligned with consumers' taste predicted from data, potentially influencing subsequent consumer behavior. These regulations especially pose a challenge to digital platforms, as their success hinges on seamless data flow between firms and consumers. Using a difference-in-differences approach with transaction data, we find that post-CCPA, Californians reduce purchase by 4.1%, increase returns by 2.9%. Moreover, we find that Californians spend more time online and visit more webpages, potentially indicating increased search efforts. Mechanism analysis suggests that firms under CCPA proactively alter their data collection strategy to reduce the liability. These results reveal the complex interplay between privacy regulation and consumer behavior, highlighting the need for a nuanced understanding of the trade-offs between privacy protection and economic outcomes. Collapse

Topics: information privacy law legal context consumer behavior advertising management website

Methods: experimental group longitudinal research natural experiment archival research difference in differences

The double side of flow in regret and product returns: Maximizers versus satisficers

2023 | International Journal of Information Management | Citations: 0

Authors: Barta, Sergio; Gurrea, Raquel; Flavián, Carlos

Abstract: While the positive aspects of the flow state have been widely researched, the ef ... Expand

Abstract: While the positive aspects of the flow state have been widely researched, the effects of being aware of this state and the negative consequences still need to be explored. The loss of awareness that flow state may bring can lead to the purchase of products that consumers afterward regret and want to return them. This research aims to understand flow consciousness’s effect on consumer post-purchase regret from a dual perspective (process and outcome regret). The relevance of these relationships is also examined by analyzing the differences between 2 groups: maximizers and satisficers consumers. Through a structural equation model based on covariances tested with EQS 6.4, the results show that flow consciousness generates process regret but not outcome regret. How­ ever, the differences found between the two groups are worth noting. The research sheds light on the effect of flow consciousness on regret and provides insight into the mechanism of product return through post-purchase regret. The theoretical and managerial implications for e-commerce retailers are discussed. Collapse

Topics: consumer behavior frequency of use electronic commerce logistics management

Methods: survey structural equation modeling statistical hypothesis test descriptive statistic Student's t-test

Influencer is the New Recommender: insights for Theorising Social Recommender Systems

2023 | Information Systems Frontiers | Citations: 0

Authors: Bawack, Ransome Epie; Bonhoure, Emilie

Abstract: Designing theory-driven social recommender systems (SRSs) has been a significant ... Expand

Abstract: Designing theory-driven social recommender systems (SRSs) has been a significant research challenge for over a decade. This study aims to identify behavioural factors that could improve the persuasiveness and quality of recommendations made by SRSs. Given both research streams’ striking similarity, it uses the recent yet rich research on social media influencers (SMI) to inform SRS research. Drawing on 72 publications, we classified 52 independent variables into 12 categories regrouped into three broad categories that characterise the relationships between the consumer and the (i) recommender system, (ii) product or brand, and (iii) and advert. The metanalysis results determined the relative importance of each category in predicting purchase intentions, placing recommender credibility and attitude towards the recommended product or brand at the top of the charts. Our findings are expected to facilitate more refined theory-building efforts and theory-driven designs in SRS research and practice. Collapse

Topics: advertising management database system Twitter TikTok IS discipline

Methods: literature study theory development computational algorithm descriptive statistic sensitivity analysis

Theories: social learning theory behavioral theory theory of planned behavior

The Cost of Free: The Effects of “Wait-for-Free” Pricing Schemes on the Monetization of Serialized Digital Content

2023 | Management Information Systems Quarterly | Citations: 0

Authors: Choi, Angela; Rhee, Ki-Eun; Yoon, Chamna; Oh, Wonseok

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, th ... Expand

Abstract: Leveraging a combination of analytical frameworks and empirical assessments, this study investigates the effects of wait-for-free (WFF) pricing schemes on the monetization of serialized, digital entertainment content, which has become increasingly pervasive on online platforms. WFF pricing is a strategy in which consumers are given the option to either wait a certain amount of time to acquire digital content at no cost or pay to consume it immediately. We evaluate the extent to which habit formation and presentbiased preferences driven by the consumption of addictive stock affect individual consumers' willingness to wait (or pay) for content, which, in turn, determines the efficacy of WFF pricing. We also examine the conditions under which consumers switch from waiting for free content to instantaneously purchasing content. Our findings indicate that WFF pricing increases the sales of serialized digital content, generating new demand from customers who would otherwise forgo participation in the market. In addition, the pricing design effectively generates sustained profits in the long run. We found that most consumers who initiate a purchase either upon initial market entry or upon switching continue to purchase as new episodes become available. Moreover, the results indicate that as a user accumulates free episodes of a specific series, given extended waiting periods, the likelihood of their conversion from a wait-for-free customer to an instant-purchase customer increases. In particular, WFF pricing effectively augments the willingness to pay of low-valuation consumers as habit formation builds up through time with the free consumption of serialized content. One free episode can elevate the likelihood of consumer purchase by up to 13%. However, as the number of free episodes consumed goes beyond a threshold, the likelihood of conversion decreases. We conclude with a discussion of managerial implications that can help content providers monetize their serialized digital content products. Collapse

Topics: price management consumer behavior advertising management digital good customer satisfaction

Methods: mathematical model robustness check econometric modeling proportional hazards model survival analysis

Theories: behavioral economics

Does the new entrant eat my pie or enlarge my pie? Market entry investigation in the online-to-offline on-demand context

2023 | Decision Support Systems | Citations: 0

Authors: Dai, Hongyan; Ta, La; Xu, Xun

Abstract: The facilitation of information technology has led to the rapid development of o ... Expand

Abstract: The facilitation of information technology has led to the rapid development of online-to-offline commerce, and this mode is attracting increasing businesses to enter the market. Its unique on-demand features affect con­ sumers’ shopping behaviors. This study uses a difference-in-difference approach with propensity score matching and machine learning approaches to examine the impact of a new giant online-to-offline entrant on consumers’ ordering and spending behavior. We find that overall, the new entrant has a negative impact on consumers’ ordering and spending from the perspective of existing providers. This negative impact is amplified if the con­ sumers are highly engaged on the platform. However, the new entrant effect is reduced if the providers use inhouse rather than outsourced deliverymen or consumers have a relatively long distance from the new entrant. Furthermore, the new entrant effect is altered if the platform implements technological innovation. On a provider level, the new entrant has a direct negative impact on consumers’ ordering and spending from homogenous providers; however, a positive spillover effect is observed in terms of increasing consumers’ spending on het­ erogeneous providers. The direct effect occurs immediately, while the spillover effect appears in a time-lagged pattern. On a product level, we find that the new entrant negatively affects consumers’ ordering and spending on substitute products also sold by the new entrant, but that their spending on non-substitute products is boosted. Our findings provide decision support for the new entrant and existing providers to expand the market to stimulate consumers’ purchase from both, to enhance their financial performance. Collapse

Topics: decision support digital innovation innovation management electronic commerce financial performance

Methods: experimental group k-means clustering machine learning computational algorithm Student's t-test

The “holiday effect” in consumer satisfaction: Evidence from review ratings

2023 | Information & Management | Citations: 0

Authors: Deng, Lingfei; Ye, Qiang; Xu, DaPeng; Sun, Fangfang

Abstract: This study explores whether and how a holiday effect exists in consumers’ review ... Expand

Abstract: This study explores whether and how a holiday effect exists in consumers’ review rating behavior, which is well explained by expectancy-disconfirmation theory (EDT). After utilizing the secondary data of online restaurant reviews and conducting an online experiment, we find that consumers have the tendency to form high expec­ tations before holidays, thus leading to more negative disconfirmation and bad moods, which finally induce their negative review rating behavior on holidays. The consumer heterogeneity analyses provide evidence that con­ sumers who are tourists, tourists with less travel experience, and male natives are more likely to post lower review ratings on holidays. Collapse

Topics: online review service quality user-generated content consumer behavior website

Methods: experiment experimental group regression analysis method product review survey

A Meta-Analytic Structural Equation Model for Understanding Social Commerce Adoption

2023 | Information Systems Frontiers | Citations: 0

Authors: Dwivedi, Yogesh K.; Ismagilova, Elvira; Sarker, Prianka; Jeyaraj, Anand; Jadil, Yassine; Hughes, Laurie

Abstract: Social commerce (s-commerce) has gained prominence with advances in social media ... Expand

Abstract: Social commerce (s-commerce) has gained prominence with advances in social media and social networking technologies over the last decade. Prior research has employed diverse theoretical perspectives to understand and explain consumer behavior within s-commerce but has also produced inconsistent results. This study integrates different theoretical perspectives including trust, social support, and social presence. The research portrays an integrated research model involving factors that impact behavioral intention and use behavior of s-commerce consumers whilst synthesizing prior empirical findings. A meta-analytic structural equation modeling (MASEM) method was used to synthesize 189 findings reported in 68 s-commerce studies and to analyze the structural model. Our findings show that trust and informational support have positive effects on behavioral intention while trust and emotional support have positive effects on use behavior. Furthermore, our findings highlight that behavioral intention influences use behavior and mediates the effect of trust and informational support on use behavior. The implications for research and practice are discussed in detail. Collapse

Topics: behavioral intention social presence usage intention consumer behavior Facebook

Methods: meta analysis descriptive statistic structural equation modeling chi squared test survey design

Shopping in a Virtual Reality: A Stimulus-Organism-Response (S-O-R) based Systematic Literature Review

2023 | International Conference on Business Informatics | Citations: 0

Authors: Elsholz, Sophia Patrizia; Korbel, Jakob Johannes; Zarnekow, Rüdiger

Abstract: The virtual reality (VR) technology has become increasingly relevant in recent ... Expand

Abstract: The virtual reality (VR) technology has become increasingly relevant in recent years due to the advantages that occur through the representation of the real within a virtual world. One promising application area of VR is virtual shopping, i.e., providing customers with the ability to visit virtual stores instead of purchasing products on 2D websites or brick-and-mortar stores. To gain insights into the opportunities of the technology in the realm of shopping, we emphasize and discuss the literature on the use of VR for shopping based on a systematic literature review, thereby deepening our understanding of virtual retail concepts and synthesizing the empirical evidence on the advantages of VR. For this purpose, we developed a Stimulus-Organism-Response (S-O-R) based framework to summarize the key findings. The results comprise suggestions for VR shopping applications as well as possible future research avenues. Collapse

Topics: virtual reality database system behavioral intention electronic commerce consumer behavior

Methods: literature study structured literature research experiment literature sample

How “What you think you know about cybersecurity” can help users make more secure decisions

2023 | Information & Management | Citations: 0

Authors: Fard Bahreini, Amir; Cavusoglu, Hasan; Cenfetelli, Ronald T.

Abstract: The increasing use of information technology artifacts in daily life makes secur ... Expand

Abstract: The increasing use of information technology artifacts in daily life makes security a shared responsibility of both users and companies. In recent years, increasing a user’s objective (i.e., actual) security knowledge and providing applications with more secure default settings appear among the most ubiquitous tools companies use to broaden their efforts to help users make more secure decisions. Examining both solutions matters because they are widely used, cost effective, and understood by many security practitioners. Additionally, default settings and users’ objective knowledge provide anchors for decision-making. However, human errors and insecure default settings are increasing and raising further questions about the efficacy of such efforts. Using the theory of bounded ra­ tionality, we investigated the role of objective, subjective (i.e., self-assessed) security knowledge, and default settings security level on the overall decision security. We found that objective security knowledge can lead to secure decisions when paired with high subjective security knowledge. In the absence of the latter, objective security knowledge is unable to lead to better security decisions. Furthermore, subjective security knowledge reduces the extent to which users fully accept default security settings, thereby mitigating bias toward insecure default settings. Collapse

Topics: mobile application data security decision making self efficacy mobile application market

Methods: survey descriptive statistic structural equation modeling literature study post-hoc analysis

Theories: theory of bounded rationality