A Study of the Network Externality Effects on the Online Group Buying

Zhenli Bi () and Bin Shi ()
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Zhenli Bi: Guangdong University of Education
Bin Shi: Shenzhen Polytechnic

Chapter Chapter 129 in The 19th International Conference on Industrial Engineering and Engineering Management, 2013, pp 1225-1236 from Springer

Abstract: Abstract The main features of group-buying are: businesses exchange for consumer flow and exposure with low prices, i.e. Group-Buy websites attracts consumers with low prices, and so consumers participate in online shopping due to the low prices. In this pattern, the network externality effect is magnified and becomes the main factor to draw consumers to participate in the online purchase. This empirical study reveals the mechanism of the network externality effects on the willingness to participate in the online group buying. The results of the study indicate that network externalities have no direct effect on the willingness to participate in online Group-Buy, but the indirect effect has been revealed. Furthermore, the indirect effect performs its functions by affecting the participants’ trust in Group-Buy websites and affecting the consumers’ cognition of discounts.

Keywords: Discount; Externality; Online group buying; Price trust; Willingness to buy (search for similar items in EconPapers)
Date: 2013
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Persistent link: https://EconPapers.repec.org/RePEc:spr:sprchp:978-3-642-38427-1_129

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DOI: 10.1007/978-3-642-38427-1_129

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