IDEAS home Printed from https://ideas.repec.org/
MyIDEAS: Login to save this article or follow this journal

Experiential goods with network externalities effects: An empirical study of online rating system

  • Yang, Jun
  • Mai, Enping (Shirley)
Registered author(s):

    This paper uses online users' reviews and sales information from May 2003 to March 2007 to study a new experiential product: online video game (or virtual world). The results suggest that, first of all, for a hedonic product such as an online video game, the availability of online review system could not fully transform experience attributes into search attributes. The empirical study confirms that negative word-of-mouth has more significant impact than positive reviews. The study empirically verifies that the existence of direct network externalities (i.e. a product's value increases when more consumers join the network) is crucial for a hedonic product. The size of the user base signals the quality of the game, and works like a search attribute for potential users. A large user base will reduce the negative impact from unfavorable reviews.

    If you experience problems downloading a file, check if you have the proper application to view it first. In case of further problems read the IDEAS help page. Note that these files are not on the IDEAS site. Please be patient as the files may be large.

    File URL: http://www.sciencedirect.com/science/article/B6V7S-4X6V9Y8-1/2/5d3ea15f775c723fb1eaf774ba91f6b2
    Download Restriction: Full text for ScienceDirect subscribers only

    As the access to this document is restricted, you may want to look for a different version under "Related research" (further below) or search for a different version of it.

    Article provided by Elsevier in its journal Journal of Business Research.

    Volume (Year): 63 (2010)
    Issue (Month): 9-10 (September)
    Pages: 1050-1057

    as
    in new window

    Handle: RePEc:eee:jbrese:v:63:y::i:9-10:p:1050-1057
    Contact details of provider: Web page: http://www.elsevier.com/locate/jbusres

    References listed on IDEAS
    Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

    as in new window
    1. Klein, Lisa R., 1998. "Evaluating the Potential of Interactive Media through a New Lens: Search versus Experience Goods," Journal of Business Research, Elsevier, vol. 41(3), pages 195-203, March.
    2. Nelson, Philip, 1974. "Advertising as Information," Journal of Political Economy, University of Chicago Press, vol. 82(4), pages 729-54, July/Aug..
    3. Wright, Alice A & Lynch, John G, Jr, 1995. " Communication Effects of Advertising versus Direct Experience When Both Search and Experience Attributes Are Present," Journal of Consumer Research, University of Chicago Press, vol. 21(4), pages 708-18, March.
    4. Jean Tirole, 1988. "The Theory of Industrial Organization," MIT Press Books, The MIT Press, edition 1, volume 1, number 0262200716, June.
    5. Jones, Michael A. & Reynolds, Kristy E. & Arnold, Mark J., 2006. "Hedonic and utilitarian shopping value: Investigating differential effects on retail outcomes," Journal of Business Research, Elsevier, vol. 59(9), pages 974-981, September.
    6. Bone, Paula Fitzgerald, 1995. "Word-of-mouth effects on short-term and long-term product judgments," Journal of Business Research, Elsevier, vol. 32(3), pages 213-223, March.
    7. Citrin, Alka Varma & Stem, Donald Jr. & Spangenberg, Eric R. & Clark, Michael J., 2003. "Consumer need for tactile input: An internet retailing challenge," Journal of Business Research, Elsevier, vol. 56(11), pages 915-922, November.
    8. Strahilevitz, Michal A & Loewenstein, George, 1998. " The Effect of Ownership History on the Valuation of Objects," Journal of Consumer Research, University of Chicago Press, vol. 25(3), pages 276-89, December.
    9. Shiv, Baba & Fedorikhin, Alexander, 1999. " Heart and Mind in Conflict: The Interplay of Affect and Cognition in Consumer Decision Making," Journal of Consumer Research, University of Chicago Press, vol. 26(3), pages 278-92, December.
    10. Vijay Mahajan & Eitan Muller & Roger A. Kerin, 1984. "Introduction Strategy for New Products with Positive and Negative Word-of-Mouth," Management Science, INFORMS, vol. 30(12), pages 1389-1404, December.
    11. Nelson, Phillip, 1970. "Information and Consumer Behavior," Journal of Political Economy, University of Chicago Press, vol. 78(2), pages 311-29, March-Apr.
    12. AfDB AfDB, . "AfDB Group Annual Report 2005," Annual Report, African Development Bank, number 61 edited by Koua Louis Kouakou.
    13. Banerjee, Abhijit V, 1992. "A Simple Model of Herd Behavior," The Quarterly Journal of Economics, MIT Press, vol. 107(3), pages 797-817, August.
    14. Darby, Michael R & Karni, Edi, 1973. "Free Competition and the Optimal Amount of Fraud," Journal of Law and Economics, University of Chicago Press, vol. 16(1), pages 67-88, April.
    15. Grewal, Dhruv & Iyer, Gopalkrishnan R. & Krishnan, R. & Sharma, Arun, 2003. "The Internet and the price-value-loyalty chain," Journal of Business Research, Elsevier, vol. 56(5), pages 391-398, May.
    16. Katz, Michael L & Shapiro, Carl, 1985. "Network Externalities, Competition, and Compatibility," American Economic Review, American Economic Association, vol. 75(3), pages 424-40, June.
    17. Eastlick, Mary Ann & Lotz, Sherry L. & Warrington, Patricia, 2006. "Understanding online B-to-C relationships: An integrated model of privacy concerns, trust, and commitment," Journal of Business Research, Elsevier, vol. 59(8), pages 877-886, August.
    18. Ford, Gary T & Smith, Darlene B & Swasy, John L, 1990. " Consumer Skepticism of Advertising Claims: Testing Hypotheses from Economics of Information," Journal of Consumer Research, University of Chicago Press, vol. 16(4), pages 433-41, March.
    19. West, Patricia M & Broniarczyk, Susan M, 1998. " Integrating Multiple Opinions: The Role of Aspiration Level on Consumer Response to Critic Consensus," Journal of Consumer Research, University of Chicago Press, vol. 25(1), pages 38-51, June.
    20. Holbrook, Morris B & Hirschman, Elizabeth C, 1982. " The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun," Journal of Consumer Research, University of Chicago Press, vol. 9(2), pages 132-40, September.
    21. Park, Cheol & Lee, Thae Min, 2009. "Information direction, website reputation and eWOM effect: A moderating role of product type," Journal of Business Research, Elsevier, vol. 62(1), pages 61-67, January.
    22. Brown, Jacqueline Johnson & Reingen, Peter H, 1987. " Social Ties and Word-of-Mouth Referral Behavior," Journal of Consumer Research, University of Chicago Press, vol. 14(3), pages 350-62, December.
    23. Bearden, William O & Etzel, Michael J, 1982. " Reference Group Influence on Product and Brand Purchase Decisions," Journal of Consumer Research, University of Chicago Press, vol. 9(2), pages 183-94, September.
    24. Baohong Sun & Jinhong Xie & H. Henry Cao, 2004. "Product Strategy for Innovators in Markets with Network Effects," Marketing Science, INFORMS, vol. 23(2), pages 243-254, October.
    25. Hirschman, Elizabeth C, 1992. " The Consciousness of Addiction: Toward a General Theory of Compulsive Consumption," Journal of Consumer Research, University of Chicago Press, vol. 19(2), pages 155-79, September.
    26. Katz, Michael L & Shapiro, Carl, 1986. "Technology Adoption in the Presence of Network Externalities," Journal of Political Economy, University of Chicago Press, vol. 94(4), pages 822-41, August.
    Full references (including those not matched with items on IDEAS)

    This item is not listed on Wikipedia, on a reading list or among the top items on IDEAS.

    When requesting a correction, please mention this item's handle: RePEc:eee:jbrese:v:63:y::i:9-10:p:1050-1057. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Zhang, Lei)

    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 references are entirely missing, you can add them using this form.

    If the full references list an item that is present in RePEc, but the system did not link 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 profile, as there may be some citations waiting for confirmation.

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

    This information is provided to you by IDEAS at the Research Division of the Federal Reserve Bank of St. Louis using RePEc data.