TY - GEN
T1 - How to influence my customers? the impact of electronic market Design
AU - Nan, Hu
AU - Bin, Chen
AU - Jialie, Shen
AU - Ling, Liu
PY - 2008
Y1 - 2008
N2 - This paper investigates the strategic decisions of online vendors for offering different mechanism, such as sampling and online reviews of information products, to increase their online sales. Focusing on measuring the effectiveness of electronic market design (offering reviews, sampling, or both), our study shows that online markets behavior as communication markets, and consumers learn product quality information both passively (reading online reviews) and actively but subjectively (listening to music sampling). Using data from Amazon, first we show that sampling along is a strong product quality signal that reduces the product uncertainty after controlling for halo effect. In general, products with sampling option enjoy a higher conversion rate (which leads to better sales) than those without sampling because sampling decreases the uncertainty of consuming experience goods. Second, the impact of online reviews on sales conversion rate is lower for experience goods with a sampling option than those without. Third, when the uncertainty of the societal reviews is higher, sampling plays a more important role because it mitigates such uncertainty introduced by online reviews.
AB - This paper investigates the strategic decisions of online vendors for offering different mechanism, such as sampling and online reviews of information products, to increase their online sales. Focusing on measuring the effectiveness of electronic market design (offering reviews, sampling, or both), our study shows that online markets behavior as communication markets, and consumers learn product quality information both passively (reading online reviews) and actively but subjectively (listening to music sampling). Using data from Amazon, first we show that sampling along is a strong product quality signal that reduces the product uncertainty after controlling for halo effect. In general, products with sampling option enjoy a higher conversion rate (which leads to better sales) than those without sampling because sampling decreases the uncertainty of consuming experience goods. Second, the impact of online reviews on sales conversion rate is lower for experience goods with a sampling option than those without. Third, when the uncertainty of the societal reviews is higher, sampling plays a more important role because it mitigates such uncertainty introduced by online reviews.
KW - Conversion rate
KW - Electronic market design
KW - Halo effect
KW - Online product reviews
KW - Sampling
UR - https://www.scopus.com/pages/publications/57349192018
U2 - 10.1145/1367497.1367684
DO - 10.1145/1367497.1367684
M3 - 会议稿件
AN - SCOPUS:57349192018
SN - 9781605580852
T3 - Proceeding of the 17th International Conference on World Wide Web 2008, WWW'08
SP - 1117
EP - 1118
BT - Proceeding of the 17th International Conference on World Wide Web 2008, WWW'08
T2 - 17th International Conference on World Wide Web 2008, WWW'08
Y2 - 21 April 2008 through 25 April 2008
ER -