Finding an incentive compatible method to assess account values can be seen as the bedrock of social media research across all platforms and is of crucial importance for researches and practitioners alike. This study presents a new method of applying the willingness to accept (instead of the commonly applied willingness to pay for establishing account values on Instagram), by modifying a randomised Vickrey Auction. Primary research among 1024 participants and 409 Instagram users measured the willingness to accept, in relation to demographic variables, account and interaction metrics. The average account was valued at 100 EUR median, correlating significantly with participants' income and prevalently with the number of followers. Other significant correlations were found in the duration since sign up, number of posts, average number of likes and comments as well as the decision to establish a micro blogging business. Findings are discussed by regarding the limitations and implications for Instagram's business model in terms of a Freemium model, insurances companies offering privacy enhancing features and ad campaign pricing when users engage in brand collaborations.
Chapter: 2.6 Conceptual Framework:
2.6.1 Willingness to Accept:
In the context of quantifying the personal value of an account, the distinction between willingness to pay (WTP) and willingness to accept (WTA) is of great significance for the outcome and is consequently highlighted in the conceptual framework of the study (Horowitz and McConnell, 2002). Thereby, the WTA corresponds to the monetary equivalent at which an individual is indifferent between keeping a good and abandoning it (Zeiler and Plott, 2004). On the other hand, WTP, is usually described as the maximum amount, an individual is willing to pay in order to transfer a good into his own possession. Research findings regarding the amount of the WTA have remained unchanged for the past 15 years and are aptly described by John K. Horowitz et al. (2000, p. 1): "Previous authors have shown that WTA is usually substantially larger than WTP, and almost all have remarked that the WTP/WTA ratio is much higher than their economic intuition would predict." The difference between the two metrics is partially explained by the endowment effect7, a psychological effect that leads to higher perceived value of goods in own possession (Knetsch et al., 2001, Kahneman et al., 1991, Zeiler and Plott, 2004). Other researchers, especially in the online context, use Akerlof's (1970) assumptions regarding quality uncertainties in order to explain the discrepancy (Horowitz and McConnell, 2000, Neus, 2007, Pae, 2005). The concept refers to the uncertainty of the decision maker about the value of the commodity. Decision makers are assumed to generally avoid having to make a decision under (complete) uncertainty (Neus, 2007, Davis and Reilly, 2012, Okada, 2010). Therefore, decision makers strictly prefer to delay the purchase situation until more information about the commodity is available or expertise is gained. In the case of a decision maker not being able to defer the moment of decision to a later moment in time, he will subsequently demand for an adequate risk premium (Rf 0) to compensate for the presence of adverse information. However, it must be 7 Sometimes described as divestiture aversion emphasised that this explanation can only account for imperfect markets, as it relies on the existence of asymmetric information. As uncertainty is expected to play a significant role when it comes to assessing the value of an Instagram account, the used mechanism will be adjusted to mitigate a possible discrepancy (Georgantzis and Navarro-Martinez, 2010, Isik, 2004, Zhao and Kling, 2001). Current literature in the field, such as Bauer et al. (2012) often failed to consider this significant difference and consequently received distorted results.
2.6.2 The Becker-DeGroot-Marschak Mechanism:
Companies, policy makers and economists are often interested to know how much a person is willing to pay for a good or service (Albrecht and Maurer, 2000). The same applies to ist counterpart, the willingness to accept (Dubourg et al., 1994). In practise, however, exact approximations are difficult to obtain or result in disproportionate cost increases (Higham, 2002). The main reason for that is, that surveyed people generally face no incentive to state their true WTP/WTA (Wertenbroch and Skiera, 2002, Breidert et al., 2006). Moreover, rational people deviate from their strategy to reveal their true WTP/WTA, whenever they see the possibility to positively influence their derived, expected utility (Neus, 2007). Current literature concerning online social media and networks found various approaches to narrow down consumer's willingness to purchase or sell items. (Schreiner and Hess, 2013b). The most effective way, regarding implementation and consumption, are direct questions (e.g. monitoring purchasing decisions) with predetermined response options (Grossklags and Acquisti, 2007). Hann and colleagues used a conjoint analysis to measure the WTP in a cost-benefit analysis (Hann et al., 2002). This
Auteur Andreas Banzerus
Product type Paperback
Maat 220 x 155 x 6 mm
Gewicht van product 166 g
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