Interactive media and social exchange of market information

A persistent belief in marketing communication is that consumer word-of-mouth (WOM) plays a crucial role in the diffusion of information in a society. The Internet, the largest network ever created by humans, demonstrates the validity of this wisdom by enabling individual consumers from all over the world to engage in many-to-many information exchange. The proliferation of virtual consumer communities or online feedback systems on the Internet, however, raises the question of how to foster cooperative communication among individual consumers in these multi-agent communication settings. In this decentralized environment where autonomous individuals interact with one another, people may be tempted not to make their own contributions and instead to benefit from the information provided by others. If everyone behaves in such a way, however, a virtual community cannot be sustained, and eventually no one will benefit from the community. Social scientists define this situation as a communication dilemma. Based on the literatures of social exchange, social dilemma, collective action, and innovation diffusion, this study explores the possibilities of reducing individuals’ exploitative motivations in virtual social collectivities. As a possible solution to the free-rider problem in virtual communities, an alternative communication structure based on a network of private communication spaces (in contrast to the typical structure based on a public electronic bulletin board) is suggested and tested in a longitudinal experimentation. A major finding is that consumers’ WOM motivation in a multi-agent communication setting like virtual communities can be enhanced substantially by introducing an appropriate structure of information exchange. Theoretical and managerial implications of the findings are discussed.