Social Influence, Competition, and Free Riding: Examining Seller Interactions within an Online Social Network

Abstract

Online social networks are increasingly being used to conduct commercial activities, and many online social networking platforms allow users to sell products to their online connections. Although extensive research has been conducted on the interactions among buyers within a social network, interactions among sellers have rarely been explored. Using seller data from a company that sells on a major online social networking platform in China, we empirically examine how a seller’s effort and sales performance are affected by the effort and sales performance of other sellers she is connected to (i.e., her inviter and invitees) and the commissions she has received. We find evidence for social influence and competition effects in the “inviter-to-invitee” direction and sellers’ free riding behavior driven by the commissions they receive from their invitees’ sales. These results extend the social network literature that has largely focused on connected buyers (or users) to connected sellers and offer implications for social networking platforms to promote seller participation.

Keywords: social network, connected sellers, seller interaction, social influence, seller competition, free riding