Editor’s Introduction 20(2)

Vladimir Zwass, Editor
International Journal of Electronic Commerce,
Volume 20, Number 2, Winter 2015-16, p. 175.

As a virtual good, an additional copy of an online game costs very little. This does not mean that running a business that offers online games is almost cost-free. Hence the wide use of the freemium monetization model in the marketing of online social games, which include the well-known massively multiplayer online role-playing games (MMORPG). As the name suggests, a key feature of these games is the social dynamics that draws users into the variously named groups or communities, and fosters their continuing play and loyalty. Experience shows that the freemium in this context is heavy on the free and much weaker on the premium (i.e., paid) use. Further, the majority of the “premium” users are, in the terms ported from the gambling industry, minnows (low spenders) rather than whales, who spend more intensely on the more expensive premium versions of the game and on the virtual products associated with it. Converting minnows into whales underpins much of the financial health of the game suppliers. In this issue, Savannah Wei Shi, Mu Xia, and Yun Huang present their empirical study of the influence of various aspects of social dynamics on users’ spending behavior, with an emphasis on converting minnows into whales. Clearly, aside from the contribution to theory, the work will be of interest to game designers and producers. It complements the paper recently published on the topic of MMORPG in the International Journal of Electronic Commerce, which has been widely cited and well-received by Forbes and other media [1].

Among the big ideas in electronic commerce are recommender systems. They personalize seller websites, shorten search time, lower cognitive load, and drive the sales of recommended products. What about products that are not on the recommendation list? Will potential buyers’ attention be drawn away from those items, with negative consequences for their sales? In the next paper in this issue, David Bodoff and Shuk Ying Ho present an empirical investigation of this question, based on consumer search theory. The answer is: Yes, indeed, the sampling of items that are not included in the recommendations is negatively affected by the use of recommenders. This result has obvious, weighty implications for online sellers, who need to balance the advantages of potentially higher sales of the suggested items with the cannibalization effects on other items. By considering two search distributions in their problem setup—stock items and recommended items—the authors also contribute to consumer search theory.

The authors of the next paper present a novel approach to measuring the effects of the different aspects of online consumer reviews, in the context of the sales of mobile apps. Ting-Peng Liang, Xin Li, Chin-Tsung Yang, and Mengyue Wang show the effectiveness of this method, which they call multifacet sentiment analysis, by comparing the influence of articulated consumer opinions along the dimension of product quality versus that of service quality. The new method contributes to our knowledge of the effects of electronic word of mouth, and deserves testing and potential application within a broader product set.

It would be an exaggeration to say that electronic commerce runs on trust at this point in the game, but it would not be a wild exaggeration. Trust in the selling platform, such as Taobao or Amazon, is under many circumstances transferred to trust in the seller, and one is probably more likely to buy a product from a seller operating on the Taobao platform than from a seller offering the sought product independently. However, the circumstances (moderators, such as institutional arrangements) need to be looked into and actualized. Xiayu Chen, Qian Huang, Robert M. Davison, and Zhongsheng Hua empirically study the seller attributes and institutional mechanisms that influence trust transfer from the platform, such as an e-mall, to the participating seller and offer several nonobvious contributions to our knowledge about online sales.

[1] Moon, J., Hossain, M.D., Sanders, G.L., Garrity, E.J., and Jo, S. “Player commitment to massively multiplayer online role-playing games (MMORPGs): An integrated model.” International Journal of Electronic Commerce 17(4), 2013, pp. 7-38.