The Dynamic Interaction Effects Between Box Revenue And Online Word Of Mouth

With the continuous expansion of online retailers and the increasingly rich scenarios of offline consumption,online shopping,online delivery and online travel booking business become the mainstream of business transactional applications.Based on the anonymity,sharing and other characteristics of the online evaluation system,consumers are more likely to share and learn product information from anywhere in the world by submitting their reviews online,and then generate large amounts of online reviews data.As an important form of online word of mouth,online review is gradually replacing the traditional word of mouth and becoming an important reference for consumer purchasing decisions.In this paper,we first take online learning into the consumer purchase decision model and analyze the correlations among online word-of-mouth,consumer behavior and movie revenue.What is more,unlike others,our study adopts a simultaneous equation system which not only considers the concurrent relationship between WOM and retail sales but also reflects how WOM and retail sales affect each other over a longer term.We first review the impact of OWOM and then we study the impact of online word-of-mouth on consumer purchase intention and movie box office revenue respectively based on the data crawled from the Douban website and boxoffice.Next,we adopt 3SLS procedure to simultaneously estimate the system of two equations and verify the dynamic interaction between OWOM and box office revenue.Our findings strongly support the value of considering the endogeneity of OWOM and its interdependence with box office revenue.Our findings also reveal the mechanism of how WOM valence influences box office revenue,that is the OWOM's rating indirectly influences the box office revenue through its effect on the OWOM's volume.Finally,combine with existing research results of OWOM,we explain the existing phenomenon and reveals the new law about OWOM.The research is of great practical significance for enriching the theory of OWOM and the operation strategy of online retailers.