IDEAS home Printed from https://ideas.repec.org/a/eee/jbrese/v167y2023ics0148296323004927.html
   My bibliography  Save this article

How do likes influence revenue? A randomized controlled field experiment

Author

Listed:
  • Grahl, Jörn
  • Hinz, Oliver
  • Rothlauf, Franz
  • Abdel-Karim, Benjamin M.
  • Mihale-Wilson, Cristina

Abstract

This article presents a randomized controlled field experiment to study the influence of likes on revenue. The results indicate that likes can have a substantial positive impact on revenue, but this effect is moderated by the time of the shopping visits. Likes are mainly effective during non-work time (evenings or weekends) when people may have more time to consider additional information. During non-work hours, the control group (without likes) spent 9,293.40 Euro while the treatment group (who observed likes) spent 11,241.71 Euro. Overall, we estimate the value of a like during non-work hours at .14 % of the focal store’s average product price. We also find that likes benefit most the already popular products. The positive effect of likes during non-work hours is mainly driven by an increased propensity to buy (i.e., conversion). We do not observe significant changes in the money spent once the buying decision has been made.

Suggested Citation

  • Grahl, Jörn & Hinz, Oliver & Rothlauf, Franz & Abdel-Karim, Benjamin M. & Mihale-Wilson, Cristina, 2023. "How do likes influence revenue? A randomized controlled field experiment," Journal of Business Research, Elsevier, vol. 167(C).
  • Handle: RePEc:eee:jbrese:v:167:y:2023:i:c:s0148296323004927
    DOI: 10.1016/j.jbusres.2023.114133
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0148296323004927
    Download Restriction: Full text for ScienceDirect subscribers only

    File URL: https://libkey.io/10.1016/j.jbusres.2023.114133?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to search for a different version of it.

    References listed on IDEAS

    as
    1. Imai, Kosuke & Keele, Luke & Tingley, Dustin & Yamamoto, Teppei, 2011. "Unpacking the Black Box of Causality: Learning about Causal Mechanisms from Experimental and Observational Studies," American Political Science Review, Cambridge University Press, vol. 105(4), pages 765-789, November.
    2. Babin, Barry J & Darden, William R & Griffin, Mitch, 1994. "Work and/or Fun: Measuring Hedonic and Utilitarian Shopping Value," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 20(4), pages 644-656, March.
    3. Fischer, Eileen & Arnold, Stephen J, 1990. "More than a Labor of Love: Gender Roles and Christmas Gift Shopping," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 17(3), pages 333-345, December.
    4. Hinz, Oliver & Eckert, Jochen & Skiera, Bernd, 2011. "Drivers of the Long Tail Phenomenon: An Empirical Analysis," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 56544, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).
    5. Xitong Li & Jörn Grahl & Oliver Hinz, 2022. "How Do Recommender Systems Lead to Consumer Purchases? A Causal Mediation Analysis of a Field Experiment," Information Systems Research, INFORMS, vol. 33(2), pages 620-637, June.
    6. Meek, Stephanie & Wilk, Violetta & Lambert, Claire, 2021. "A big data exploration of the informational and normative influences on the helpfulness of online restaurant reviews," Journal of Business Research, Elsevier, vol. 125(C), pages 354-367.
    7. Hajli, Nick & Sims, Julian & Zadeh, Arash H. & Richard, Marie-Odile, 2017. "A social commerce investigation of the role of trust in a social networking site on purchase intentions," Journal of Business Research, Elsevier, vol. 71(C), pages 133-141.
    8. Hongbin Cai & Yuyu Chen & Hanming Fang, 2009. "Observational Learning: Evidence from a Randomized Natural Field Experiment," American Economic Review, American Economic Association, vol. 99(3), pages 864-882, June.
    9. Huang, Xun (Irene) & Dong, Ping & Labroo, Aparna A., 2018. "Feeling disconnected from others: The effects of ambient darkness on hedonic choice," International Journal of Research in Marketing, Elsevier, vol. 35(1), pages 144-153.
    10. Chatterjee, Sheshadri & Kumar Kar, Arpan, 2020. "Why do small and medium enterprises use social media marketing and what is the impact: Empirical insights from India," International Journal of Information Management, Elsevier, vol. 53(C).
    11. Jacoby, Jacob & Szybillo, George J & Berning, Carol Kohn, 1976. "Time and Consumer Behavior: An Interdisciplinary Overview," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 2(4), pages 320-339, March.
    12. Cragg, John G, 1971. "Some Statistical Models for Limited Dependent Variables with Application to the Demand for Durable Goods," Econometrica, Econometric Society, vol. 39(5), pages 829-844, September.
    13. Chris Forman & Anindya Ghose & Batia Wiesenfeld, 2008. "Examining the Relationship Between Reviews and Sales: The Role of Reviewer Identity Disclosure in Electronic Markets," Information Systems Research, INFORMS, vol. 19(3), pages 291-313, September.
    14. Arts, Joep W.C. & Frambach, Ruud T. & Bijmolt, Tammo H.A., 2011. "Generalizations on consumer innovation adoption: A meta-analysis on drivers of intention and behavior," International Journal of Research in Marketing, Elsevier, vol. 28(2), pages 134-144.
    15. Abhijit V. Banerjee, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 107(3), pages 797-817.
    16. Evanschitzky, Heiner & Emrich, Oliver & Sangtani, Vinita & Ackfeldt, Anna-Lena & Reynolds, Kristy E. & Arnold, Mark J., 2014. "Hedonic shopping motivations in collectivistic and individualistic consumer cultures," International Journal of Research in Marketing, Elsevier, vol. 31(3), pages 335-338.
    17. Catherine Tucker & Juanjuan Zhang, 2011. "How Does Popularity Information Affect Choices? A Field Experiment," Management Science, INFORMS, vol. 57(5), pages 828-842, May.
    18. Philip O'Reilly & Patrick Finnegan, 2010. "Intermediaries in inter-organisational networks: building a theory of electronic marketplace performance," European Journal of Information Systems, Taylor & Francis Journals, vol. 19(4), pages 462-480, August.
    19. Donthu, Naveen & Kumar, Satish & Pandey, Neeraj & Pandey, Nitesh & Mishra, Akanksha, 2021. "Mapping the electronic word-of-mouth (eWOM) research: A systematic review and bibliometric analysis," Journal of Business Research, Elsevier, vol. 135(C), pages 758-773.
    Full references (including those not matched with items on IDEAS)

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Liangfei Qiu & Zhan (Michael) Shi & Andrew B. Whinston, 2018. "Learning from Your Friends’ Check-Ins: An Empirical Study of Location-Based Social Networks," Information Systems Research, INFORMS, vol. 29(4), pages 1044-1061, December.
    2. Engström, Per & Forsell, Eskil, 2018. "Demand effects of consumers’ stated and revealed preferences," Journal of Economic Behavior & Organization, Elsevier, vol. 150(C), pages 43-61.
    3. Jurui Zhang & Yong Liu & Yubo Chen, 2015. "Social Learning in Networks of Friends versus Strangers," Marketing Science, INFORMS, vol. 34(4), pages 573-589, July.
    4. Shijie Lu & Dai Yao & Xingyu Chen & Rajdeep Grewal, 2021. "Do Larger Audiences Generate Greater Revenues Under Pay What You Want? Evidence from a Live Streaming Platform," Marketing Science, INFORMS, vol. 40(5), pages 964-984, September.
    5. Octavian Carare, 2012. "The Impact Of Bestseller Rank On Demand: Evidence From The App Market," International Economic Review, Department of Economics, University of Pennsylvania and Osaka University Institute of Social and Economic Research Association, vol. 53(3), pages 717-742, August.
    6. Ram, Pappu Kalyan & Pandey, Neeraj & Persis, Jinil, 2024. "Modeling social coupon redemption decisions of consumers in food industry: A machine learning perspective," Technological Forecasting and Social Change, Elsevier, vol. 200(C).
    7. Sanjeev Dewan & Yi-Jen (Ian) Ho & Jui Ramaprasad, 2017. "Popularity or Proximity: Characterizing the Nature of Social Influence in an Online Music Community," Information Systems Research, INFORMS, vol. 28(1), pages 117-136, March.
    8. Ni Huang & Tianshu Sun & Peiyu Chen & Joseph M. Golden, 2019. "Word-of-Mouth System Implementation and Customer Conversion: A Randomized Field Experiment," Information Systems Research, INFORMS, vol. 30(3), pages 805-818, September.
    9. Tobias Kretschmer & Christian Peukert, 2020. "Video Killed the Radio Star? Online Music Videos and Recorded Music Sales," Information Systems Research, INFORMS, vol. 31(3), pages 776-800, September.
    10. Johannes Loh, 2022. "Selection, Consumption, and New Music Exploration in an Online Social Network: A Dyadic Approach," CESifo Working Paper Series 10120, CESifo.
    11. Ye Hu & Kitty Wang & Ming Chen & Sam Hui, 2021. "Herding Among Retail Shoppers: the Case of Television Shopping Network," Customer Needs and Solutions, Springer;Institute for Sustainable Innovation and Growth (iSIG), vol. 8(1), pages 27-40, June.
    12. Yang Jiang & Yi-Chun (Chad) Ho & Xiangbin Yan & Yong Tan, 2022. "What’s in a “Username”? The Effect of Perceived Anonymity on Herding in Crowdfunding," Information Systems Research, INFORMS, vol. 33(1), pages 1-17, March.
    13. Chong (Alex) Wang & Xiaoquan (Michael) Zhang & Il-Horn Hann, 2018. "Socially Nudged: A Quasi-Experimental Study of Friends’ Social Influence in Online Product Ratings," Information Systems Research, INFORMS, vol. 29(3), pages 641-655, September.
    14. Jin Huang, 2017. "To Glance or to Peruse: Observational and Active Learning from Peer Consumers," Working Papers wp2018_1716, CEMFI.
    15. Jin Huang, 2017. "To Glance or to Peruse: Observational and Active Learning from Peer Consumers," Working Papers wp2017_1716, CEMFI.
    16. Zhanfei Lei & Dezhi Yin & Sabyasachi Mitra & Han Zhang, 2022. "Swayed by the reviews: Disentangling the effects of average ratings and individual reviews in online word‐of‐mouth," Production and Operations Management, Production and Operations Management Society, vol. 31(6), pages 2393-2411, June.
    17. Juanjuan Zhang & Peng Liu, 2012. "Rational Herding in Microloan Markets," Management Science, INFORMS, vol. 58(5), pages 892-912, May.
    18. Mina Ameri & Elisabeth Honka & Ying Xie, 2019. "Word of Mouth, Observed Adoptions, and Anime-Watching Decisions: The Role of the Personal vs. the Community Network," Marketing Science, INFORMS, vol. 38(4), pages 567-583, July.
    19. Ni Huang & Gordon Burtch & Yumei He & Yili Hong, 2022. "Managing Congestion in a Matching Market via Demand Information Disclosure," Information Systems Research, INFORMS, vol. 33(4), pages 1196-1220, December.
    20. S. Cicognani & P. Figini & M. Magnani, 2016. "Social Influence Bias in Online Ratings: A Field Experiment," Working Papers wp1060, Dipartimento Scienze Economiche, Universita' di Bologna.

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:167:y:2023:i:c:s0148296323004927. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/jbusres .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.