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

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

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Article ID: iaor20164395
Volume: 61
Issue: 12
Start Page Number: 2963
End Page Number: 2981
Publication Date: Dec 2015
Journal: Management Science
Authors: , , ,
Keywords: retailing, behaviour, marketing, social, economics
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.

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