Social Commerce Beyond Word of Mouth: Role of Social Distance and Social Norms in Online Referral Incentive Systems

Shi, N., Y. Hong, and K. Wang and P. A. Pavlou (2013), “Social Commerce Beyond Word of Mouth: Role of Social Distance and Social Norms in Online Referral Incentive Systems”, Proceedings of the 34th International Conference on Information Systems (ICIS), Milan, Italy.

19 Pages Posted: 5 May 2014

See all articles by Nan Shi

Nan Shi

School of Management, Xi'an Jiaotong University

Yili Hong

University of Houston - C.T. Bauer College of Business

Kanliang Wang

Xi'an Jiaotong University (XJTU) - School of Management

Paul A. Pavlou

University of Houston - C.T. Bauer College of Business

Date Written: May 5, 2012

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 e-commerce when rational economic rules can be potentially harmful.

Keywords: social commerce, referral performance, social distance, ultimatum game, construal level theory

Suggested Citation

Shi, Nan and Hong, Yili and Wang, Kanliang and Pavlou, Paul A., Social Commerce Beyond Word of Mouth: Role of Social Distance and Social Norms in Online Referral Incentive Systems (May 5, 2012). Shi, N., Y. Hong, and K. Wang and P. A. Pavlou (2013), “Social Commerce Beyond Word of Mouth: Role of Social Distance and Social Norms in Online Referral Incentive Systems”, Proceedings of the 34th International Conference on Information Systems (ICIS), Milan, Italy., Available at SSRN: https://ssrn.com/abstract=2432805

Nan Shi

School of Management, Xi'an Jiaotong University ( email )

No.28 Xianning West Rd.
Xi'an, Shaanxi 710049
China

Yili Hong (Contact Author)

University of Houston - C.T. Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Kanliang Wang

Xi'an Jiaotong University (XJTU) - School of Management ( email )

28,Xianning West Road
Xi'an, Shaanxi 710049
China

Paul A. Pavlou

University of Houston - C.T. Bauer College of Business

Houston, TX 77204-6021
United States

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
305
Abstract Views
1,525
rank
108,753
PlumX Metrics