Social commerce beyond word of mouth: Role of social distance and social norms in online referral incentive systems

Nan Shi, Kevin Yili Hong, Kanliang Wang, Paul A. Pavlou

Research output: Chapter in Book/Report/Conference proceedingConference contribution

7 Scopus citations

Abstract

Online social referral incentive systems help attract new customers to commercial websites by leveraging existing customers' social networks. Designing an appropriate referral incentive system allows websites to increase their customer base and enhance sales. This study integrates ultimatum game (fairness) theory with construal level theory to investigate the impacts of social distance, social norms, and monetary incentives on the performance of different designs of online social referral incentive systems. Incentivized controlled lab experiments and randomized field experiments with an online ticketing company were conducted to test hypotheses on the effects of social distance, social norms, and the split of the referral bonus (monetary incentive) between a proposer and a responder on the performance of online social referral incentive systems. Results show that with small social distance (friends), the success of a referral is determined by the social norms between friends but not by the split of the referral bonus; with a large social distance (acquaintances), the success of the referral is determined by a fair split of the bonus between acquaintances. By studying the dynamics of social networking, our research stresses the role of social elements in ecommerce when rational economic rules can be potentially harmful.

Original languageEnglish (US)
Title of host publicationInternational Conference on Information Systems (ICIS 2013)
Subtitle of host publicationReshaping Society Through Information Systems Design
Pages3440-3458
Number of pages19
StatePublished - Dec 1 2013
Externally publishedYes
EventInternational Conference on Information Systems, ICIS 2013 - Milan, Italy
Duration: Dec 15 2013Dec 18 2013

Publication series

NameInternational Conference on Information Systems (ICIS 2013): Reshaping Society Through Information Systems Design
Volume4

Other

OtherInternational Conference on Information Systems, ICIS 2013
CountryItaly
CityMilan
Period12/15/1312/18/13

Keywords

  • Construal level theory
  • Electronic commerce
  • Incentive design
  • Online social referral incentive systems
  • Social commerce
  • Social distance
  • Social norms
  • Ultimatum game

ASJC Scopus subject areas

  • Computer Science Applications
  • Statistics, Probability and Uncertainty
  • Applied Mathematics
  • Library and Information Sciences

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  • Cite this

    Shi, N., Hong, K. Y., Wang, K., & Pavlou, P. A. (2013). Social commerce beyond word of mouth: Role of social distance and social norms in online referral incentive systems. In International Conference on Information Systems (ICIS 2013): Reshaping Society Through Information Systems Design (pp. 3440-3458). (International Conference on Information Systems (ICIS 2013): Reshaping Society Through Information Systems Design; Vol. 4).