Susceptibility and Influence in Social Media Word-of-Mouth

42 Pages Posted: 12 Feb 2015

See all articles by Jörg Claussen

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management); Copenhagen Business School - Department of Innovation and Organizational Economics

Benjamin Engelstätter

University of Applied Sciences Darmstadt

Michael R. Ward

University of Texas at Arlington - College of Business Administration - Department of Economics; ZEW, Mannheim

Date Written: December 22, 2014

Abstract

Peer influence through word-of-mouth (WOM) plays an important role in many information systems but identification of causal effects is challenging. We identify causal WOM effects in the empirical setting of game adoption in a social network for gamers by exploiting differences in individuals’ networks. Friends of friends do not directly influence a focal user, so we use their characteristics to instrument for behavior of the focal user’s friends. We go beyond demonstrating a large and highly significant WOM effect and also assess moderating factors of the strength of the effect on the sender and receiver side. We find that users with the most influence on others tend to be better gamers, have larger social networks, but spend less time playing. Interestingly, these are also the users who are least susceptible to WOM effects.

Keywords: Word-of-Mouth, Peer Effects, Adoption, Social Networks, Video Games

JEL Classification: D85, L14, M31

Suggested Citation

Claussen, Jörg and Engelstätter, Benjamin and Ward, Michael Robert, Susceptibility and Influence in Social Media Word-of-Mouth (December 22, 2014). ZEW - Centre for European Economic Research Discussion Paper No. 14-129, Available at SSRN: https://ssrn.com/abstract=2564065 or http://dx.doi.org/10.2139/ssrn.2564065

Jörg Claussen

Ludwig Maximilian University of Munich (LMU) - Faculty of Business Administration (Munich School of Management) ( email )

Kaulbachstr. 45
Munich, DE 80539
Germany

Copenhagen Business School - Department of Innovation and Organizational Economics ( email )

Kilevej 14A
Frederiksberg, 2000
Denmark

Benjamin Engelstätter (Contact Author)

University of Applied Sciences Darmstadt ( email )

Max-Planc-Str.
Dieburg, 64807
Germany

Michael Robert Ward

University of Texas at Arlington - College of Business Administration - Department of Economics ( email )

330 Business Building
Box 19479
Arlington, TX 76019
United States
817-272-3090 (Phone)
817-272-3145 (Fax)

ZEW, Mannheim ( email )

D-68034 Mannheim
Germany

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