4.7 YUBO CHEN, QI WANG, and JINHONG XIE* Online Social Interactions: A Natural Experiment on Word of Mouth Versus Observational Learnin

Question 1

WOM

Answer 1

word of mouth

Question 2

OL

Answer 2

observational learning.

Question 3

from information policy shifts at Amazon.com, the authors design three studies to examine three issues regarding the two types of social interaction:

Answer 3

(1) their differential impact on product sales, (2) their lifetime effects, and (3) their interaction effects.

Question 4

results 2

Answer 4

• while negative WOM is more influential than positive WOM, positive OL information significantly increases sales, but negative OL information has no effect. This suggests that reporting consumer purchase statistics can help mass-market products without hurting niche products.
• The results also reveal that the sales impact of OL increases with WOM volume.