The Impact of Word of Mouth via Twitter on Moviegoers’ Decisions and Film Revenues - Revisiting Prospect Theory: How WOM about Movies Drives Loss-Aversion and Reference-Dependence Behaviors

This study drew on the existing decision process theory to empirically examine the effect of word of mouth (WOM) generated by social media.

The Impact of Word of Mouth via Twitter on Moviegoers' Decisions and Film Revenues—Revisiting Prospect Theory: How WOM about Movies Drives Loss-Aversion and Reference-Dependence Behaviors

Yeujun Yoon

Peking University

Charin Polpanumas

Lazada.com

Young Joon Park

Peking University

MANAGEMENT SLANT

  • The study suggests moviegoers’ reaction to WOM follows a similar pattern as prospect theory expects: reference dependence, loss aversion, and diminishing sensitivity.
  • Consumers’ evaluation of the movie is a function not only of WOM volume or direction but also of the consumers’ expectation level as constructed through previous Tweets.
  • Negative WOM in social media like...

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