Herding and Social Media Word-of-Mouth: Evidence from Groupon

X. LI, L. WU

MIS Quarterly


Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Keywords: Herding, word-of-mouth, social media, interaction effect, complementarity

Modern online retailing practices provide consumers with new types of real-time information that can potentially increase demand. In particular, showing past product sales information can reduce uncertainty about product quality, inducing consumers to herd. This effect could be particularly salient for experience goods due to their inherent high uncertainty about product quality. Social media word-of-mouth (WOM) can increase product awareness as product information spreads via social media, increasing demand directly and also amplifying existing quality signals such as past sales. This study examines the mechanisms behind the strategy of facilitating herding and the strategy of integrating social media platforms to understand the potential complementarities between the two strategies. We conduct empirical analysis using data from which sells goods in a fast cycle format of “daily deals”. We find that facilitating herding and integrating social media platforms are complements in generating sales, supporting that it is beneficial to combine the two strategies on social media-driven platforms. Furthermore, we find that herding is more salient for experience goods, consistent with our hypothesized mechanisms, while the effect of social media WOM does not differ between experience goods and search goods

Impact of Average Rating on Social Media Endorsement: The Moderating Role of Rating Dispersion and Discount Threshold


Information Systems Research


Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Is your valley as green as it should be? Incorporating economic development into environmental performance indicators


Clean Technologies and Environmental Policy


Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Social Presence in Virtual World Collaboration: An Uncertainty Reduction Perspective Using a Mixed Methods Approach


MIS Quarterly


Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Keywords: Virtual worlds, uncertainty reduction theory, institutional trust, sequential mixed methods

The life-like collaborative potential offered by virtual worlds (VWs) has sparked significant interest for companies to experiment with VWs in order to organize convenient, cost-effective virtual global workplaces. Despite the initial hype, recent years have witnessed a rather stagnant use of VWs for collaboration in organizations. Previous research recognizes that the inherent uncertainties within the VW environment are factors limiting their utilization by businesses. Hence, grounding this research in uncertainty reduction theory (URT), we aim to understand the modalities and mechanisms for mitigating the uncertainties and fostering user trust within VWs so that they can be effectively utilized as a workplace collaboration tool. With this end in view, we propose contextualizing and extending McKnight et al.’s (2002) institutional trust framework to the context of VWs by examining the significant role that social presence has in influencing the efficacy of the institution-based trust-building factors of situational normality and structural assurance in VWs. Using a sequential mixed methods approach (Venkatesh et al. 2013; Venkatesh et al. 2016), this research integrates results from a quantitative study with findings from a qualitative study to arrive at rich and robust inferences and meta-inferences, with the qualitative method first corroborating the inferences obtained from the quantitative research and then complementing them by identifying boundary conditions that may limit the use of VWs in organizations for workplace collaboration. The results together suggest not only the direct, but also the interactional (complementary and substitutive) influences of social presence on the relationships of the two institutional-trust-building factors to user trust in VWs

An Integrated Revenue Management Framework for a Firm's Greening, Pricing and Inventory Decisions


International Journal of Production Economics

January 2018, vol. 195, pp.373-390

Departments: Information Systems and Operations Management, GREGHEC (CNRS)

Keywords: Environment, Newsvendor problem, Pricing, Market segmentation, Distribution-free approach

There is a growing interest on developing efficient ways of incorporating environmental considerations into business practices in order to meet both consumers' demand for green products/services, and the firms' sustainable profitability. The main contribution of this article is in developing an integrated revenue management framework to address a firm's greening (investment) effort, pricing and inventory decisions. It is assumed that the firm inaugurates a green product along with its existing product. Even though the firm offers both the green and regular product at differentiated prices, the market segmentation as a result of this price differentiation is regarded as imperfect. This imperfect market segmentation causes a demand leakage mainly due to the heterogeneity among the customers' willingness-to-pay. These effects are included in our proposed model and simplified analytical solutions are developed to solve the same. Additional scenarios where a firm experiences a price-dependent stochastic demand with an unknown distribution is also modeled. This scenario is addressed using a distribution-free approach based on Scarf' s rule. The performance of the proposed methods and the significance of the modeling framework are finally corroborated through several simulations. This analysis provides a sustainable environment, production and retailing framework while still augmenting profitability using fundamental tools from revenue management

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