Investigating transitive influences on WOM: from the product network perspective

Abstract

As is popular in e-commerce, consumers share their product experiences and opinions on the Web by assigning rating stars or writing reviews. The information constitutes word of mouth (WOM) about products. An increasing number of studies have sought to understand how WOM metrics are related to product sales. However, current research focuses mainly on single-product-oriented WOM metrics, which do not consider the complex relationships between products. Given the underlying influential impacts between related products, we propose a market-structure-based WOM metric that integrates the product comparison network and transitive influence measures. An empirical study based on data from Amazon.com shows that the proposed transitive WOM metric outperforms other traditional WOM metrics on predicting product sales, and its unique features are also demonstrated. The findings provide important insights into social influence theory and electronic commerce research. In practice, the research provides a method of measuring product WOM from a whole-market perspective, which is especially important for market structure analysis.