Building consumer trust online
Communications of the ACM
A literature review and classification of electronic commerce research
Information and Management
HICSS '01 Proceedings of the 34th Annual Hawaii International Conference on System Sciences ( HICSS-34)-Volume 7 - Volume 7
Group Buying on the Web: A Comparison of Price-Discovery Mechanisms
Management Science
BT Technology Journal
Comparison of the group-buying auction and the fixed pricing mechanism
Decision Support Systems
What Trust Means in E-Commerce Customer Relationships: An Interdisciplinary Conceptual Typology
International Journal of Electronic Commerce
Segmenting uncertain demand in group-buying auctions
Electronic Commerce Research and Applications
Use of social network information to enhance collaborative filtering performance
Expert Systems with Applications: An International Journal
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With the advance of Social Network Service (SNS) like Facebook, Social Commerce (SC) such as Groupon now prospers, which provides daily deals at a highly discounted price by gathering buying power of consumers through SNS. From the perspective of quality-uncertainty, it is unusual to sell experience and credence goods/services on the internet as Groupon does. In traditional E-commerce (EC) purchasing decisions rely on information provided after the actual use of products by other consumers, while in Groupon it heavily depends on opinion even before purchasing. For example, traditional sites use a third-party recommendation including feedback mechanism, while Groupon encourages consumers to post and share their preference on goods/services over SNS. Given this difference, focusing on the effect of SNS, we collect and analyze changes of sales for deals Groupon provided, using an econometric model that reflects our understanding of consumer behavior in the presence of different degrees of quality-uncertainty. The information from SNS is captured by using a function called "Facebook Like" that is a recommendation system in which suggestions are brought by one's friends, and it is a module that can be installed in any website. In this study, we demonstrate that the information from SNS positively affects sales for deals, which implies that SNS provides recommendation and encourages consumers to purchase by reducing encountered uncertainty. In addition, we also find that the effect of SNS is enlarged as the extent of the quality-uncertainty increases. This result means that under the presence of high degree of uncertainty, the information from SNS gives consumers a stronger belief in quality than information from a third-party. Besides, as many other studies proved, we also confirm that the internet turns experience goods into search goods by substituting in-store visits with virtual encounters.