Evaluating the effects of peer information and social influence on food preferences
Date
2020
Authors
Journal Title
Journal ISSN
Volume Title
Publisher
University of Delaware
Abstract
Utilizing social networks in marketing has grown in popularity over the years. The ability for peer information to revise consumer preferences has been the subject of debate in recent literature. Even more so, the debate extends to the magnitude of the revisions that are made to consumer preferences due to information from peers in a social network. In this study, we investigate the impact of social networks and peer influence on consumer preferences for three food items: raw oysters, raw mushrooms and chocolate fondue. We conduct an incentive compatible economic experiment to examine how factors such as connectivity of group members, the use of a “locally produced” product label, and varying levels of peer information impact the extent consumers update their purchasing preferences. ☐ A power analysis was conducted and results from 1,068 participants in the Mid-Atlantic of the U.S. suggest willingness-to-pay (WTP) across the three food items decreased when participants were not assigned to receive a local label; WTP for oysters and mushrooms decreased for all levels of peer information, whereas WTP for chocolate decreased only when participants were assigned to receive information about their peers’ frequency of consumption for the food items. When participants were assigned to receive the local label, WTP did not change except for an increase in WTP for oysters and mushrooms when participants were assigned to receive information about their peers’ frequency of consumption for the food items. ☐ When the results were analyzed with metrics for connectivity between participants in a social network, the metric “betweenness” (the frequency a participant is a mutual acquaintance between two or more participants in a social network) had the highest change in WTP among five social network metrics. Furthermore, participants who were assigned to not receive the local label but receive information about their peers’ WTP for the food items as well as their peers’ frequency of consumption for the food items had a significant increase in WTP for four of the five social network metrics, indicating that the combination of peer information may results in higher susceptibility among consumers and therefore consumers may be more influenced by information from their peers. In total, these results indicate that the inclusion of a local label did not change consumers WTP on average, whereas when the food items were described without the local label, consumers decreased their WTP across all three food items. The results also indicated that the amount of information given about peers’ preferences and the relationship of the individuals in a social network can cause significant changes in WTP. These results can have direct implications about whether social networks are an effective tool in marketing food items.
Description
Keywords
Social networks, Consumer preferences, Raw oysters, Raw mushrooms, Chocolate fondue, Food