Impact of Live Chat on Purchase in Electronic Markets: The Moderating Role of Information Cues

Xue (Jane) Tan (), Youwei Wang () and Yong Tan ()
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Xue (Jane) Tan: Department of Operations and Decision Technologies, Kelley School of Business, Indiana University, Bloomington, Indiana 47405
Youwei Wang: Department of Information Management and Information Systems, School of Management, Fudan University, Yangpu District, Shanghai 200433, China
Yong Tan: Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195

Information Systems Research, 2019, vol. 30, issue 4, 1248-1271

Abstract: Live chat tools have emerged as a channel for fostering synchronous communication between sellers and buyers. The role of live chat in the e-commerce environment, however, is largely underexplored. Using granular data from Alibaba, we examine the effect of live chat on consumers’ purchase decisions. After controlling for the selection process that customers with high purchase intention are more likely to initiate live chat in the first place, we find that live chat can increase purchase probability of tablets by 15.99%. We also investigate how the effect of live chat is moderated by existing information cues: product sales volume and seller feedback score. The substitutional or complementary patterns allow us to understand how live chat tools change the ways consumers evaluate product quality and seller credibility. We observe a substitutional effect of live chat on seller feedback score such that sellers with low feedback score benefit more from live chat conversations than sellers with high score. On the contrary, products with high past sales volume sell better after live chat, indicating a reinforcement effect. Such findings deepen our understanding of the difference between various information cues in electronic markets. As one of the first systematic studies to investigate live chat, our paper contributes to web trust conceptual frameworks with empirical analyses and sheds light on practical decisions faced by e-vendors and platform designers.

Keywords: live chat; reputation systems; feedback score; sales volume; online word-of-mouth; e-commerce; electronic market (search for similar items in EconPapers)
Date: 2019
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Citations: View citations in EconPapers (12)

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