The effects of social distance on proposer's offer and responder's intention to accept in online referral bonuses programs under Chinese setting

The referral bonuses program is one of the most effective ways to attract potential customers to attend online group-buy sites. This study tends to explore the underlying mechanism on why and how the social distance between a proposer and a responder influences the proposer's sharing behavior and responder's acceptance behavior. Drawing upon the ultimatum game theory as well as social norm and market norm literature, we design three experiments to investigate this problem. The results suggest that the proposers would like to share more to the socially closer people than the distant ones, and the responders are more likely to accept the referrals from their socially closer friends than the socially distant ones. Interestingly, the result also reveals that sharing amount deviates from the fair value when social distance is near rather than far. Theoretical and practical implications are discussed.