Information cascades in online reading: an empirical investigation of panel data

Purpose – The purpose of this paper is to examine information cascades in the context of users’ e-book reading behavior and differentiate it from alternative factors that lead to herd behavior, such as network externalities and word-of-mouth effects. Design/methodology/approach – This paper constructed panel data using information concerning 226 e-books in 30 consecutive days from Sina.com’s reading channel (Book.Sina.com.cn) from October 2, 2013, to October 31, 2013 of the same year in China. A multinomial logit market-share model was employed. Findings – E-books’ ranking has a significant impact on their market share, as predicted by informational cascades theory. Higher ranking e-books’ clicks will see a greater increase as a result of an increase in clicks ranking. Due to the information cascades effect, review volume had no impact on the market share of popular e-books. Total votes had a powerful impact on the market share of e-books, showing that once information cascade occurred, it could be enhanc...

[1]  C. J. Armstrong,et al.  Promoting your e-books: lessons from the UK JISC National e-Book Observatory , 2010, Program.

[2]  S. Bikhchandani,et al.  You have printed the following article : A Theory of Fads , Fashion , Custom , and Cultural Change as Informational Cascades , 2007 .

[3]  G. Gowrisankaran,et al.  Network Externalities and Technology Adoption: Lessons from Electronic Payments , 2002 .

[4]  Ian Rowlands,et al.  UK scholarly e-book usage: a landmark survey , 2008, Aslib Proc..

[5]  D. Sudharshan,et al.  Equilibrium Characteristics of Multinomial Logit Market Share Models , 1991 .

[6]  Izak Benbasat,et al.  Product-Related Deception in E-Commerce: A Theoretical Perspective , 2011, MIS Q..

[7]  David Godes,et al.  Using Online Conversations to Study Word-of-Mouth Communication , 2004 .

[8]  Yi-Fen Chen,et al.  Herd behavior in purchasing books online , 2008, Comput. Hum. Behav..

[9]  Bin Gu,et al.  Do online reviews matter? - An empirical investigation of panel data , 2008, Decis. Support Syst..

[10]  Lee G. Cooper,et al.  Parameter Estimation for a Multiplicative Competitive Interaction Model—Least Squares Approach , 1974 .

[11]  Malik Magdon-Ismail,et al.  Information Cascades in Social Media in Response to a Crisis : a Preliminary Model and a Case Study , 2012 .

[12]  Wolfgang Kellerer,et al.  Outtweeting the Twitterers - Predicting Information Cascades in Microblogs , 2010, WOSN.

[13]  Xiaotong Li,et al.  Informational cascades in IT adoption , 2004, CACM.

[14]  Kai-Yu Tang,et al.  Explaining undergraduates' behavior intention of e-textbook adoption: Empirical assessment of five theoretical models , 2014, Libr. Hi Tech.

[15]  Yong Tan,et al.  Do I Follow My Friends or the Crowd? Information Cascades in Online Movie Ratings , 2014, Manag. Sci..

[16]  Lorin M. Hitt,et al.  Self Selection and Information Role of Online Product Reviews , 2007, Inf. Syst. Res..

[17]  Yong Liu.  Word-of-Mouth for Movies: Its Dynamics and Impact on Box Office Revenue , 2006 .

[18]  Glenn J. Browne,et al.  Information Cascades in the Adoption of New Technology , 2002, ICIS.

[19]  R. Pindyck,et al.  Consumption Externalities and Diffusion in Pharmaceutical Markets: Antiulcer Drugs , 2000 .

[20]  Jukka-Pekka Onnela,et al.  Spontaneous emergence of social influence in online systems , 2009, Proceedings of the National Academy of Sciences.

[21]  Prabhudev Konana,et al.  The Social-Economic-Psychological model of technology adoption and usage: an application to online investing , 2005, Decis. Support Syst..

[22]  Ian Rowlands,et al.  Scholarly e-books: the views of 16, 000 academics: Results from the JISC National E-Book Observatory , 2009, Aslib Proc..

[23]  Jing Zhu,et al.  A meta-analysis of mobile commerce adoption and the moderating effect of culture , 2012, Comput. Hum. Behav..

[24]  Sungjoon Lee,et al.  An integrated adoption model for e-books in a mobile environment: Evidence from South Korea , 2013, Telematics Informatics.

[25]  A. Banerjee,et al.  A Simple Model of Herd Behavior , 1992 .

[26]  Christian Derbaix,et al.  Inducing word-of-mouth by eliciting surprise ? a pilot investigation , 2003 .

[27]  Liyi Zhang,et al.  Correlation analysis between users' educational level and mobile reading behavior , 2011, Libr. Hi Tech.

[28]  Heshan Sun,et al.  A Longitudinal Study of Herd Behavior in the Adoption and Continued Use of Technology , 2013, MIS Q..

[29]  Jaemin Jung,et al.  Factors affecting e-book reader awareness, interest, and intention to use , 2012, New Media Soc..

[30]  Bin Gu,et al.  Informational Cascades and Software Adoption on the Internet: An Empirical Investigation , 2008, MIS Q..

[31]  Robert J. Kauffman,et al.  Opening the "Black Box" of Network Externalities in Network Adoption , 2000, Inf. Syst. Res..

[32]  Corey Davis,et al.  E-Books Revisited: Surveying Student E-Book Usage in a Distributed Learning Academic Library 6 Years Later , 2010 .

[33]  Lones Smith,et al.  Pathological Outcomes of Observational Learning , 2000 .

[34]  Dan Ariely,et al.  EBAY'S HAPPY HOUR: NON-RATIONAL HERDING IN ONLINE AUCTIONS , 2005 .

[35]  Pei-Yu Sharon Chen,et al.  The Impact of Online Recommendations and Consumer Feedback on Sales , 2004, ICIS.

[36]  Pradeep Chintagunta,et al.  The Effects of Online User Reviews on Movie Box Office Performance: Accounting for Sequential Rollout and Aggregation Across Local Markets , 2010, Mark. Sci..

[37]  C. Shapiro,et al.  Systems Competition and Network Effects , 1994 .

[38]  Chun Liu,et al.  Social Influence Bias : A Randomized Experiment , 2014 .

[39]  Shachar Kariv,et al.  Distinguishing Informational Cascades from Herd Behavior in the Laboratory , 2004 .

[40]  Barrie Gunter,et al.  Electronic books: a survey of users in the UK , 2005, Aslib Proc..

[41]  Dong-Hee Shin,et al.  Understanding e-book users: Uses and gratification expectancy model , 2011, New Media Soc..

[42]  Markus Christen,et al.  Demand and Supply Dynamics for Sequentially Released Products in International Markets: The Case of Motion Pictures , 2003 .

[43]  Francesco Virili,et al.  Network effects in technology acceptance: Laboratory experimental evidence , 2010, Int. J. Inf. Manag..

[44]  Krishna P. Gummadi,et al.  Delayed information cascades in Flickr: Measurement, analysis, and modeling , 2012, Comput. Networks.

[45]  Byungtae Lee,et al.  Herding behavior in online P2P lending: An empirical investigation , 2012, Electron. Commer. Res. Appl..