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The Effect of Social Interaction on Economic Transactions: Evidence from Changes in Two Retail Formats

Author

Listed:
  • Avi Goldfarb

    () (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

  • Ryan C. McDevitt

    () (Fuqua School of Business, Duke University, Durham, North Carolina 27008)

  • Sampsa Samila

    () (National University of Singapore, Singapore 119245)

  • Brian S. Silverman

    () (Rotman School of Management, University of Toronto, Toronto, Ontario M5S 3E6, Canada)

Abstract

Examining changes in two different retail formats, we show that consumers alter their purchases depending on the retail environment. In both settings, the change in behavior coincides with a reduction in the interpersonal interaction required to complete a transaction. As such, we contend that the format changes reduced a “social friction” that would otherwise inhibit consumers due to an implicit cost associated with ordering certain items in social settings. This paper was accepted by Pradeep Chintagunta, marketing .

Suggested Citation

  • Avi Goldfarb & Ryan C. McDevitt & Sampsa Samila & Brian S. Silverman, 2015. "The Effect of Social Interaction on Economic Transactions: Evidence from Changes in Two Retail Formats," Management Science, INFORMS, vol. 61(12), pages 2963-2981, December.
    • Handle: RePEc:inm:ormnsc:v:61:y:2015:i:12:p:2963-2981
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    File URL: http://dx.doi.org/10.1287/mnsc.2014.2030
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    References listed on IDEAS

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    Cited by:

    1. Rachel Cummings & Federico Echenique & Adam Wierman, 2016. "The Empirical Implications of Privacy-Aware Choice," Operations Research, INFORMS, vol. 64(1), pages 67-78, February.
    2. Olden, Andreas, 2018. "What Do You Buy When No One’s Watching? The Effect of Self-Service Checkouts on the Composition of Sales in Retail," Discussion Papers 2018/3, Norwegian School of Economics, Department of Business and Management Science.

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