The Effect of Social Interaction on Economic Transactions: Evidence from Changes in Two Retail Formats
Management Science, Forthcoming
Posted: 16 Feb 2015 Last revised: 29 Jun 2015
Date Written: July 1, 2014
Examining changes in two different retail formats, we show that consumers alter their purchases depending on the retail environment. In both settings, the change in behavior coincides with a reduction in the interpersonal interaction required to complete a transaction. As such, we contend that the format changes reduced a “social friction” that would otherwise inhibit consumers due to an implicit cost associated with ordering certain items in social settings.
Keywords: social cues, consumer choice, retail, social frictions
JEL Classification: D12, L81, L86
Suggested Citation: Suggested Citation