Social commerce in a networked society: Considering social distance and norms in referral incentive mechanisms for online business

Nan Shi, Kanliang Wang, Yili Hong

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

Abstract

The referral incentive programs are one of the common incentive mechanisms to attract new customers in e-commerce websites, especially for start-ups, by leveraging existing customer's social networks. Designing an appropriate referral reward program will allow online businesses to increase customer base and enhance sales. This paper leverages the ultimatum game (sense of fairness) and construal level theory to investigate the impacts of social distance, social norm and market norm on the performance of different designs of referral reward programs. Lab experiments were conducted to test the proposed hypotheses. The results suggest that with close social distance, the success of an invitation is affected by the social norm among friends, but not monetary incentive; with far social distance, the success of an invitation is affected by division of referral bonuses. And a fair split of reward bonuses works best for friends with far social distance. The research sheds light on the appropriate design of incentives for different type of customers.

Original languageEnglish (US)
Title of host publication18th Americas Conference on Information Systems 2012, AMCIS 2012
Pages3292-3301
Number of pages10
StatePublished - Dec 1 2012
Externally publishedYes
Event18th Americas Conference on Information Systems 2012, AMCIS 2012 - Seattle, WA, United States
Duration: Aug 9 2012Aug 12 2012

Publication series

Name18th Americas Conference on Information Systems 2012, AMCIS 2012
Volume4

Other

Other18th Americas Conference on Information Systems 2012, AMCIS 2012
CountryUnited States
CitySeattle, WA
Period8/9/128/12/12

Keywords

  • Electronic commerce
  • Market norm
  • Referral incentive program
  • Social commerce
  • Social distance
  • Social norm

ASJC Scopus subject areas

  • Computer Networks and Communications
  • Computer Science Applications
  • Information Systems
  • Library and Information Sciences

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