The Influence of Product Ranking on Product Sales in Online Shopping from the Perspective of Information Cascades: The Moderating Roles of Product Type and Product Price

Abstract

Abstract: Using real online product data from the largest business-to-consumer platform in China of Tmall.com, this study examines the effect of product ranking on online consumers’ purchasing behavior from the perspective of information cascades, and investigates the moderating roles of product type and product price. This study uncovers several notable findings. After controlling for network effects and word-of-mouth effects, we find that product ranking has a positive impact on product sales in online shopping. Furthermore, if the effects of product type or product price are analyzed separately, the moderating effects are significant. Specifically, product ranking has a greater impact on product sales for experience goods than for search goods. Product ranking also has a stronger influence on product sales for high-price goods than for low-price goods. However, after considering the influence of product type and product price at the same time, we find that the interaction between the two is significant, the moderating effect of product type is still significant, but the moderating effect of product price disappears. In terms of the the level of influence that product ranking has on product sales, the greatest influence is for high-price experience products, the second greatest influence is for low-price experience products and high-price search products, and the least influence is for low-price search products. This study enriches the theory of online consumer behavior research and provides practical guidance for online retailers and e-commerce platforms to better carry out online marketing.

Key words: product ranking, online shopping, information cascades, product type, product price

Liu Qihua, Wang Li, Tong Zelin, Li Yiran, Zhang Xiaoyu. The Influence of Product Ranking on Product Sales in Online Shopping from the Perspective of Information Cascades: The Moderating Roles of Product Type and Product Price[J]. Management Review, 2023, 35(1): 174-186.

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