Social Media, Consumer Behaviour and Information Disclosure: Evidence from the MERS Outbreak in South Korea

Abstract

South Korea’s health officials did not disclose the identities of hospitals exposed to MERS-CoV for the first three weeks of the outbreak in 2015, leading to amplified fear in the society. To ascertain the uncertainty costs due to the failure of timely information provision, we examine the effect of the information regarding MERS outbreak on shopping patterns in the retail market. We find that those facing social buzz of MERS hospitals near their home significantly reduced their spending at crowded shopping places such as big-box and department stores. However, the avoidance behaviour disappeared after the government started to disclose the accurate information. This finding suggests that the information uncertainty raised excessive anxiety among the consumers.