Understanding the Effects of Message Design on Firm-Mediated Online Social Interactions: A Randomized Field Experiment

Recent advances in IT have provided firms unprecedented ability to manage online social interactions. Despite growing popularity, few studies have examined firm's optimal design choices in firm-mediated social interactions. We examine whether and how a firm can enhance effectiveness of online social interactions, by simply varying message shared by referrers. We focus on two pieces of information in message – information of sender’s purchase status and information about existence of referral rewards – and their impacts on recipient’s purchase. Collaborating with an online deal platform, we conduct a randomized field experiment testing effectiveness of different firm-mediated messages. We find that 1) information of sender’s purchase leads to more purchases from recipients; such effect is larger for products with strong uncertainty and network effect; 2) the incremental effect of Referral Rewards information crucially depends on the nature of product. The findings will guide optimal message design at aggregate and individual level