Electronic Commerce Research and Applications 12 (2013) 337–346

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Electronic Commerce Research and Applications

journal homepage: www.elsevier.com/locate/ecra

How online social ties and product-related risks influence purchase

intentions: A Facebook experiment
Jyun-Cheng Wang a,⇑, Ching-Hui Chang b
a
Institute of Service Science, National Tsing-Hua University, 101 Kuang-Fu Road, Sec. 2, Hsinchu, Taiwan, ROC
b
Institute of Technology Management, National Tsing-Hua University, 101 Kuang-Fu Road, Sec. 2, Hsinchu, Taiwan, ROC

a r t i c l e i n f o a b s t r a c t

Article history: Drawing on information processing theory and the stimulus–organism–response model, we developed
Received 11 January 2012 research hypotheses about consumers’ decision-making processes. Specifically, we examined the effects
Received in revised form 13 March 2013 of online tie strength, perceived diagnosticity, and product-related risks on consumers’ purchase inten-
Accepted 14 March 2013
tions. We conducted a field experiment on Facebook to test these hypotheses. We found that the product
Available online 2 April 2013
information and recommendations provided by friends with whom consumers have strong ties are per-
ceived as having a high level of diagnosticity. The latter increases the probability that the consumers will
Keywords:
purchase the product in question. Product-related risks moderate the effect of tie strength on perceived
Social networking sites
Information diagnosticity
diagnosticity. For high-risk products, the information and recommendations provided by strong-tie con-
Tie strength tacts have a greater effect on purchase intentions than the information and recommendations provided
Purchase intention by weak-tie contacts. However, we did not find this effect for low-risk products. We discuss the implica-
Product-related risks tions of our findings for both theory and practice.
Ó 2013 Elsevier B.V. All rights reserved.

1. Introduction
Consumers can obtain product information from online sources,
which are important to their purchasing decisions. Several studies
have discussed the impact of online consumer reviews on the pur-
chasing process (Chevalier and Mayzlin 2006, Dellarocas et al.
2007, Duan et al. 2008a,b, Godes and Mayzlin 2004, Koh et al.
2010, Lee et al. 2008, Liu 2006, Park and Kim 2008, Park et al.
2007). As internet social networking sites (SNSs) have become
more popular, they have forged connections among internet users
and become important sources of information for users. SNSs have
been attracting more attention from both researchers and market-
ers. In particular, researchers who have recently begun studying
this phenomenon regard it as a potential source of interesting
and valuable information. For example, Trusov et al. (2009) studied
the effect of word-of-mouth (WOM) marketing on the growth of a
social networking site and compared WOM marketing with tradi-
tional marketing techniques. They found that WOM referrals have
longer carryover effects than traditional marketing techniques.
Kelly et al. (2010) examined the factors that influence advertising
avoidance in SNSs. The researchers showed that users are more
likely to avoid advertising in their online social networking envi-
ronments if the following conditions are true: (1) the users expect
that the experience will be negative, (2) the advertising is not rel-
⇑ Corresponding author. Tel.: +886 3 571 5131x42247; fax: +886 3 561 6345.
E-mail address: jcwang@mx.nthu.edu.tw (J.-C. Wang).
evant to the users, or (3) the users are skeptical about the advertis-
ing message. Marketers have also begun to recognize the potential
of such sites as effective marketing tools. SNSs allow a company to
easily identify its target customers and instantly distribute infor-
mation to a broad range of people.
Marketers and researchers have realized the importance of so-
cial ties with respect to customers’ decision-making processes
(Arndt 1967). The different types of social ties have different im-
pacts on purchasing decisions. For example, strong ties (friends)
exert more influence over a receiver’s decision making than weak
ties (acquaintances) (Brown and Reingen 1987). However, few
scholars have studied SNSs because marketing oriented around so-
cial networking is a relatively new phenomenon. In SNSs, users
interact with one another, share information, gather ideas and
opinions, and influence one another’s perceptions (Centola 2010).
The information generated by these interactions is subsequently
dispersed and updated. This information then impacts consumers’
decision-making processes. SNSs are changing existing marketing
practices on a fundamental level because people are relying more
on the members of their own networks, such as friends and peers,
to guide their decision making instead of relying only on authority
figures, experts, the mainstream media, and mass advertising (Bry-
mer 2009). This development supports Watts and Dodds’s (2007)
argument that major cascades of influence are not driven by spe-
cific opinion leaders. Therefore, marketers must consider a new
marketing logic based on the social networking phenomenon.
Scholars should examine how the online social interactions among

1567-4223/$ - see front matter Ó 2013 Elsevier B.V. All rights reserved.
http://dx.doi.org/10.1016/j.elerap.2013.03.003
338 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346
SNS users affect purchase decision making and whether theories
about the influence of social ties in the offline context are applica-
ble to SNSs.
We develop research hypotheses about the effect of online tie
strength in SNSs on consumers’ purchase intentions. According to
the information processing model and the stimulus–organism–re-
sponse (S–O–R) model, after consumers receive information about
a product, they first process the information before purchasing the
product (Bettman 1979, Hoyer and MacInnis 2004, Mehrabian and
Russell 1975). We argue that the effect of online tie strength on
consumers’ purchase intentions is mediated by their information-
processing behavior. Perceived diagnosticity is adopted in this
study as a mediator. Perceived diagnosticity represents consumers’
perceptions of their information sources’ capacity to assist them in
evaluating the quality of products (Jiang and Benbasat 2005, Kempf
and Smith 1998, Mudambi and Schuff 2010). Information sources
are a criterion for evaluating the product information. Therefore,
in our model, we contend that if consumers receive product infor-
mation, they first evaluate the information source to help under-
stand the product’s quality and then decide whether to buy it. In
addition, product-related risks are important factors that influence
how consumers evaluate products and the information sources
(Dowling 1999). We believe that online tie strength may interact
with product-related risks. Therefore, the objective of this study
is to understand how online tie strength, perceived diagnosticity,
and product-related risks affect consumers’ intentions to purchase
a product. We conducted a field experiment on Facebook, one of
the most popular SNSs, to investigate the following three ques-
tions. Are the recommendations and information provided by dif-
ferent social ties perceived as having different levels of
diagnosticity? Do product-related risks moderate the relationship
between online tie strength and perceived diagnosticity? Does per-
ceived diagnosticity have a positive effect on purchase intentions?
In addition, the SNSs’ databases can accurately record the interac-
tions among SNS users and thereby create a valuable source of data
for social network analysis. In conducting our analysis, we attempt
to take advantage of the online interaction data collected from
websites as the basis for tie strength. Our work differs from previ-
ous studies, which used self-reported data gathered by surveys to
measure the strength of social ties (Brown and Reingen 1987, Du-
han et al. 1997, Frenzen and Nakamoto 1993, Wen et al. 2009), in
that our survey alleviates concerns about the accuracy of the infor-
mants’ retrospective reports (Bernard et al. 1984, Marsden 1990).
This paper provides evidence regarding the effect of online tie
strength on purchase intentions. Our methodology used data on
online interactions to measure the strength of social ties. By using
these online interaction data, we took an alternative perspective in
defining tie strength, which allows us to first examine the relation-
ships between online tie strength and the behavior variables. Our
work also demonstrates that the data collected from websites
can be useful to marketing companies. We developed theoretical
hypotheses regarding the underlying mechanisms of consumers’
decision-making processes within the context of SNSs. Using
empirical evidence, we argue that online tie strength, perceived
diagnosticity, and product-related risks play significant roles in
the decision-making process. This research is also important from
a managerial perspective because it shows that product-related
risks can be used as a practical criterion for users attempting to
determine from which contacts they should solicit product
recommendations.
2. Theoretical background
A social tie is defined as the set of social interactions between
two or more individuals. Previous studies have found that social
ties are important to individuals’ decision-making processes
(Arndt 1967). Social ties can be divided into different types. Grano-
vetter (1973) introduced the concept of tie strength, which refers
to the closeness of the relationships among people. Tie strength
ranges from weak to strong. If a relationship is defined as a weak
tie, then the individuals are only acquaintances and do not know
each other well. If the tie is defined as a strong tie, then the individ-
uals are friends who know each other well.
Several studies have examined the effects of tie strength on
consumer behavior. Brown and Reingen (1987) used retrospective
data collected exclusively from successful referrals to analyze
WOM-referral behavior. They found that weak and strong social
ties played different roles. Consumers generally perceived strong
ties to be more influential than weak ties in their decision-making
processes. Frenzen and Nakamoto (1993) studied the impacts of
consumer decisions to transmit or withhold word-of-mouth infor-
mation on the flow of information in a market. They demonstrated
that consumers are likely to share all types of information with
strong-tie contacts.
Duhan et al. (1997) studied the factors that influence the likeli-
hood that a consumer will use recommendations from strong-tie
sources and weak-tie sources. The researchers found that consum-
ers rely on both types of sources during the decision-making pro-
cess. That is, consumers rely on strong-tie sources if the perceived
difficulty of the task is high. Conversely, consumers tend to rely on
weak-tie sources if the product is more technical. Bruyn and Lilien
(2008) observed the reactions of 1100 individuals to receiving an
unsolicited e-mail invitation from one of their acquaintances to
participate in a survey. The researchers found that, although the
characteristics of the social ties influenced the recipients’ behav-
iors, these ties had different effects at different stages of the deci-
sion-making process. For example, tie strength had a positive effect
on awareness only during the decision-making process and trig-
gered the recipients’ interest afterward.
Wen et al. (2009) conducted an experiment using SNS pages to
investigate the effects of tie strength, endorser expertise, and prod-
uct type on advertising effectiveness. They found that strong-tie
endorsers are more effective than weak-tie endorsers at recom-
mending products with primarily hedonic value, regardless of the
strong-tie contacts’ expertise in the endorsed products. However,
for products with primarily utilitarian value, the high-expertise
endorsers had a stronger positive effect on the consumers’ pur-
chase intentions than the other endorsers, regardless of the tie
strength.
There is ample evidence that tie strength influences consumer
behavior. Strong ties and weak ties have different effects on con-
sumers’ decision-making processes in different situations. How-
ever, because SNS-oriented marketing is a relatively new
phenomenon, few of these studies have investigated SNSs.
Although scholars such as Wen et al. (2009) have recently shown
greater interest in studying SNSs, their studies have not examined
the relationship between SNSs and consumers’ decision-making
processes in detail. For example, Wen et al. (2009) did not examine
how the consumers’ decision-making processes involve their cog-
nitive systems in processing product information and evaluating
its sources. Additionally, the study did not consider the effect of
product-related risks, which are important factors that influence
consumers’ decision making (Dowling 1999).
Prior research has seldom used empirical data sources to assess
online social relationships. The data sources used to measure the
strength of social ties were essentially self-reported surveys. In
Table 1, we summarize previous studies with regard to the sources
of data on social ties. We believe that empirical data on online so-
cial relationships are particularly important to understanding the
processes underlying e-WOM. We measured tie strength with on-
line data, including friend lists and rich interaction histories. One
 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346
Table 1
Previous studies and sources of social ties.
Topics
Word-of-mouth referral behavior
Impact of tie strength on individual transmission information decisions
The factors that influence the likelihood of consumers using recommendation sources
Multistage model of word-of-mouth influence
Advertising effectiveness on social network sites
characteristic of our study is the use of online interaction data as
the basis of measuring tie strength. Our methods of examining so-
cial ties on SNSs can help address some of the limitations of previ-
ous research by utilizing readily available data to track online
interactions. In this way, our work also alleviates concerns about
the accuracy of the informants’ retrospective reports (Bernard
et al. 1984, Marsden 1990).
3. Research model and hypotheses
In the information processing model, consumers’ decision-mak-
ing processes involve cognitive behavior (Bettman 1979, Hoyer and
MacInnis 2004). Consumers are no longer passive learners who
produce stimulus response reactions. Instead, the model focuses
on how inputs from the decision environment are processed
through consumers’ cognitive systems and how they lead to final
response. These processes are similar to the S–O–R model. The S–
O–R model posits that environmental and informational cues act
as stimuli that affect an individual’s cognitive and affective reac-
tions, which, in turn, affect behavioral intentions (Mehrabian and
Russell 1975). Stimuli (S) may appear in different formats (Jacoby
2002). Past works have said that website features are important
stimuli for the online purchase process (Eroglu et al. 2003, Jiang
et al. 2010, Koufaris 2002, Parboteeah et al. 2009). The organism
(O) refers to an individual’s cognitive systems, including the cogni-
tive network and schema. The response (R) represents the psycho-
logical reactions such as attitudinal and behavioral reactions.
Based on the concepts discussed above, we proposed the theo-
retical framework, which we called the information–cognition–
intention model. Information is shown as an input for consumers.
Product information recommended by friends is a constituent of
this input. Before such information can affect behavioral inten-
tions, it must have some mental effect. Cognition is represented
as one of the major intermediate recommendation effects. The
mediating processes can be considered to be filters of the initial
information input. The behavioral intentions are consequently
generated. Following the information–cognition–intention routes,
Product-related risk
(high vs. low)
H2
Tie strength Perceived
(strong vs. weak) H1 diagnosticity H3
Information Cognition
Fig. 1. Theoretical framework.
339
Source of data on social ties References
 Offline environment Brown and Reingen (1987)
 Piano classes
 Self-reported surveys
 Offline environment Frenzen and Nakamoto (1993)
 Discount scenario
 Self-reported surveys
 Offline environment Duhan et al. (1997)
 Medical services
 Inferences from self-reported surveys
 Online environment Bruyn and Lilien (2008)
 Survey invitation message by e-mail
 E-mails
 Online environment Wen et al. (2009)
 Product endorsement message on Facebook
 Self-reported surveys
we hypothesize that after consumers receive product information,
they first use this information to understand and evaluate the qual-
ity and characteristics of the products. Afterward, depending on
their evaluations, the consumers develop different levels of pur-
chase intentions.
More specifically, we operationalize the ‘‘information’’ as prod-
uct information recommended by different social ties and product-
related risks, the ‘‘cognition’’ as perceived diagnosticity, and the
‘‘intention’’ as the purchase intentions of consumers (Fig. 1).
3.1. Tie strength and perceived diagnosticity
Measuring perceived diagnosticity is a particularly important
objective of the present study because helping consumers evaluate
products is an important goal that affects the purchasing process
for marketers. Perceived diagnosticity is defined as the extent to
which consumers consider particular aspects of their shopping
experiences to be helpful in evaluating products (Kempf and Smith
1998). Jiang and Benbasat (2005) extended this concept by show-
ing that perceived diagnosticity can describe the perceived ability
of a Web interface to convey product information that helps cus-
tomers evaluate the quality and performance of products. Mudam-
bi and Schuff (2010) applied the concept to the context of online
product reviews and found that depending on the type of product,
the characteristics of product reviews, review rating, and review
length have different effects on their perceived diagnosticity. How-
ever, Mudambi and Schuff (2010) did not study other characteris-
tics of the reviews, such as product information sources. Source
credibility theory suggests that people are more likely to be per-
suaded if the source is considered to be credible (Hovland et al.
1953, Ohanian 1990). According to this theory, information sources
seem to be a criterion for evaluating the truthfulness of the infor-
mation. We argue that different information sources could have
different effects on perceived diagnosticity.
Rogers (1995) argues that strong-tie sources are perceived as
more credible and trustworthy than weak-tie sources. In other
words, the information derived from strong-tie sources carries less
risk. Social exchange theory has shown that strong-tie sources are
likely to transmit information of higher economic value than weak-
tie sources (Frenzen and Nakamoto 1993, Sahlins 1972). Informa-
tion is more likely to be considered useful if it comes from close
sources, whereas the information from acquaintances is more
likely to be seen as less valuable or more suspicious. Consumers
Purchase can more easily evaluate products if the information about these
intentions products is provided by strong-tie sources because consumers
trust these sources and the value of the information provided by
Intention
these sources. In other words, consumers believe that a strong-
tie source can help them evaluate the quality and performances
340 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346
of products. Based on these arguments, we hypothesize that per-
ceived diagnosticity is higher for the recommendations and infor-
mation provided by strong-tie sources.
Hypothesis 1. The recommendations and information provided
by strong-tie sources will have a higher level of perceived
diagnosticity.
3.2. Product-related risks
The more that consumers have to pay for a product, the higher the
perceived risk of purchasing the product will be (Bettman 1973,
Dowling 1999). Therefore, choosing a helpful source is an important
concern for customers. Consumers collect and consider more infor-
mation about the sources’ trustworthiness if the product risks are
relatively high. Previous studies have noted that the distinction be-
tween high-risk products and low-risk products causes consumers
to utilize different psychological processes while evaluating a prod-
uct (Dowling and Staelin 1994, Payne et al. 1993). Because the eval-
uation process for high-risk products tends to be more careful,
consumers focus on their sources’ trustworthiness in these situa-
tions. In contrast, consumers are less likely to carefully evaluate
low-risk products. In these cases, consumers pay less attention to
the trustworthiness of their sources. This finding suggests that the
impact of tie strength on perceived diagnosticity is likely to differ
across product risk levels (i.e., source and product risks interact with
one another). If a product’s risks are high, then the information pro-
vided by strong-tie sources has higher perceived diagnosticity than
that provided by weak-tie sources. If a product’s risks are low, then
the information provided by strong-tie and weak-tie sources do not
have significantly different diagnosticity.
Hypothesis 2. Product-related risks moderate the relationship
between online tie strength and perceived diagnosticity.
3.3. Perceived diagnosticity and purchase intentions
From the businesses’ point of view, the ultimate goal of market-
ing is persuasion (Braun-Latour and Zaltman 2006). Both market-
ers and academic researchers believe that purchase intentions
provide valuable insights into the effectiveness of marketing.
Therefore, we chose purchase intentions as the dependent variable,
which we used to measure the effectiveness of recommendations
derived through SNSs. Previous studies have shown that perceived
diagnosticity can alleviate information asymmetry through the sig-
nals and incentives, prevent customers to purchase low-quality
products (Pavlou et al. 2007), and strengthen customers’ confi-
dence in their purchase decisions (Kempf and Smith 1998). If cus-
tomers feel that the product information is diagnostic, they are
certain about estimating product quality, and more confident
about their purchase decisions (Kempf and Smith 1998). Higher
perceived diagnosticity, which enables consumers to understand
the product more thoroughly, improves customers’ cognitive eval-
uations of the product. We suggest that if the product information
is positive and diagnostic, customers will be convinced that the
quality of the product is high, and then their purchase intentions
will likely be more positive. Therefore, for positive product infor-
mation, these improved evaluations lead them to develop higher
levels of purchase intentions. If the product information is negative
and diagnostic, customers will be convinced that the quality of the
product is low, and then their purchase intentions will likely be re-
duced. The purpose of this study is to create new marketing oppor-
tunities based on the social networking phenomenon. We only
consider the effects of positive recommendations.
Hypothesis 3. For positive recommendations, higher perceived
diagnosticity will lead to higher purchase intentions.
4. Research method
This study investigates the effects of online tie strength, per-
ceived diagnosticity, and product-related risks on consumers’ pur-
chase intentions. We conducted a field experiment on Facebook to
test our hypotheses. Founded in 2004, Facebook has become the
most popular SNS. Facebook held an initial public offering (IPO)
on May 17, 2012. There are now more than a billion monthly active
users worldwide and more than half of whom use Facebook on a
mobile device. Facebook features an application platform that al-
lows developers to implement applications and integrate them
into the site. The popularity of these Facebook applications allowed
us to pursue our research in a realistic setting. We used a Facebook
application as the platform for this study. This Facebook applica-
tion offered several advantages. We could quickly and accurately
access information about the interactions among users on Face-
book. In addition, we were able to recruit a relatively large sample
population in a short period of time.
We used a 2  2 between-subjects design to investigate the ef-
fects of strong vs. weak ties and high vs. low risks. Table 2 shows
that there were four possible combinations: strong tie and high
risks, strong tie and low risks, weak tie and high risks, and weak
tie and low risks.
4.1. Online tie strength
One critical aspect of our study was the procedure we used to
quantify the strength of the social ties between the individuals
who participated in our experiment and their friends. Previous stud-
ies have measured tie strength by using many different metrics.
Sometimes the measures have included recency of contact (Lin
et al. 1978). Other scholars have used frequency of interactions as
a surrogate for tie strength (Gilbert et al. 2008, Granovetter 1973).
In the present research, we defined tie strength as the frequency of
interactions among contacts on SNSs. We used a measure that we
called ‘‘interaction frequency’’, which we defined as the number of
wall posts exchanged between two people. Our Facebook applica-
tion allowed us to access these data, which we used to estimate
the strength of the social ties between each pair of friends. We de-
fined strong-tie friends as the three people with whom a participant
had interacted most frequently during the past three months and
weak-tie friends as the three people with whom the participant
had interacted least during the same period. Because of system lim-
itations, we were only able to retrieve Facebook’s interaction data
from the three months prior to the experiment.
4.2. Products described in the experiment
We chose snacks as the product analyzed in our experiment be-
cause the use of snacks reduces the need to measure the expertise
level of the information source. In addition, information about
snacks is often found on Facebook, and most people are potential
Table 2
The four experimental treatments.
Online tie strength Product-related risks
High risks Low risks
Strong tie Treatment 1 Treatment 2
Weak tie Treatment 3 Treatment 4
 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346
consumers of snacks. Our study examined snack products at differ-
ent price levels (i.e., low-priced and high-priced products). Several
studies have shown that product price influences consumer behav-
ior. For example, customers tend to search for more information if
the price of a product is relatively high (Beatty and Smith 1987). Be-
cause product price is a stimulus for customer thinking, high-priced
products lead customers to think harder about their purchase inten-
tions (Wathieu and Bertini 2007). Product price is related to per-
ceived risk, to the customers’ perceptions of the probability of an
uncertain outcome and the potentially adverse consequences of
purchasing a product (Dowling and Staelin 1994). Higher value
products are perceived as riskier than products that have fewer such
characteristics. We operationalize low-priced products as less risky
products and high-priced products as risky products.
We asked some people who did not participate in the main
experiment to evaluate the snack products. Based on the results,
we selected three existing snack products for each price group.
The low-priced snacks ranged from US $2 to $4, and the high-
priced snacks ranged from US $30 to $50. Within each group, we
chose products that were similar in popularity and flavor and that
used similar recommendation words to eliminate possible con-
founding effects. Each recommendation post contained a message
from the friend, a photo of the product, the price, and the product’s
description. The recommendation messages were all positive.
4.3. Experimental design
We asked the subjects in each group to imagine a scenario in
which a friend invited them to a party and asked them to bring
some snacks. While they were pondering which snacks to buy, they
noticed that their Facebook wall posts contained relevant informa-
tion. We used two types of information to construct the wall posts.
First, we replicated the 10 most recent posts on the subject’s actual
Facebook wall on the day before he or she participated in the
experiment. Second, we added three posts containing product rec-
ommendations (e.g., the snack is delicious.). The contents of the
three recommendations were quite similar for all of the subject
groups. The differences lay in the type of contact who had suppos-
edly posted the recommendation and in the price of the product.
For example, for the strong-tie and high-risk group, strong-tie
friends recommended products with high prices (see Fig. 2).
4.4. Questionnaire items
We measured two key constructs by using questionnaire items
with responses on a seven-point Likert scale ranging from
‘‘strongly disagree’’ to ‘‘strongly agree’’. To measure the perceived
diagnosticity, we adopted the questionnaire items developed by
Kempf and Smith (1998) and Jiang and Benbasat (2005, 2007)
and modified these items to fit the context of our study. In addi-
tion, the questionnaire items from Coyle and Thorson (2001) were
adopted to measure the participants’ purchase intentions. These
questions focused mainly on the subjects’ willingness to purchase,
the likelihood of purchasing, and their interest in purchasing the
product. The questionnaire items are listed in full in Appendix A.
4.5. Pilot test
We conducted a pilot test with 120 participants to check for
confounding effects and other problems that could occur during
the actual experiment. The respondents were asked to view exper-
imental Facebook pages and to complete a final questionnaire. We
obtained feedback and suggestions from the subjects after they
had completed the pilot test. In general, the respondents in all four
groups thought the experimental procedure had been successfully
performed. Their major suggestions and recommended adjust-
341
ments involved the phrasing of the questions and the design of
the Facebook application.
4.6. Participants and procedures
We advertised the Facebook application by using Facebook’s
application–distribution mechanism, which introduced random
exogenous variation through the participants. We awarded prizes
to the respondents as an incentive for completing the experiment.
Each Facebook user who chose to participate in the experiment
was randomly assigned to one of the four experimental groups.
After the Facebook users signed up to use our Facebook applica-
tion, we provided them with instructions that explained the proce-
dures. Next, we asked the subjects to provide their demographic
information and explained the hypothetical task. Then, the applica-
tion showed them a customized wall post. Finally, we asked the
subjects to complete a questionnaire.
5. Data analysis and results
We conducted a field experiment by inviting randomly selected
users on Facebook to participate in a Facebook application created
for this experiment. We recruited the 420 subjects by using Face-
book. Among the subjects, 216 (51.4%) were female, and 204
(48.6%) were male. Most of the participants (78.5%) were between
21 and 30 years old. Most had been using Facebook for more than a
year (74.5%), and a majority (68.1%) checked their Facebook wall
messages at least once a day.
5.1. Manipulation checks
To assess our operational definitions of online tie strength and
product-related risks, we asked the following two questions in
the questionnaire: ‘‘Do you think you interact often on Facebook
with the friends who provided recommendations?’’ and ‘‘Do you
think the price you saw for the snack product is high?’’ The sub-
jects’ answers were similar to our operational definitions. Table 3
shows the levels of agreement. Our manipulation of online tie
strength and product-related risks appears to have been successful.
5.2. Validity of the measurement instrument
We conducted a factor analysis and varimax rotation for the
eight items in the two constructs. We performed a Kasier–
Meyer–Olkin (KMO) test to determine whether the data were suit-
able for factor analysis. A KMO value higher than 0.5 is generally
considered sufficient (Hinton et al. 2004). The KMO value for the
combined construct was 0.88. The factor loading scores for all of
the questionnaire items were above 0.6, which indicates that the
constructs were valid (Hair et al. 1998).
We adopted a Cronbach’s a coefficient between 0.70 and 0.90 as
our criterion for internal consistency (Nunnally et al. 1967). The
Cronbach’s a values for both of the constructs were more than 0.8
(i.e., Purchase intentions: 0.870 and Perceived diagnosticity:
0.914), which indicates that each item was related to its respective
construct.
5.3. Hypothesis testing
We performed a univariate analysis by using ANOVA to deter-
mine the effects of online tie strength and product-related risks
on the perceived diagnosticity. The results are shown in Table 4.
We found that online tie strength had a significant effect
(F = 6.856, p < 0.01). We then conducted a t-test to compare the
levels of perceived diagnosticity of information from strong- and
weak-tie sources. We found that strong ties result in higher levels
342 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346

The post on the subject’s actual Facebook wall

The post on the subject’s actual Facebook wall

A message from the friend on Facebook1

A photo The product’s description and the price1

The post on the subject’s actual Facebook wall

The post on the subject’s actual Facebook wall

A message from the friend on Facebook1

A photo The product’s description and the price1

The post on the subject’s actual Facebook wall

The post on the subject’s actual Facebook wall

Fig. 2. An example of Facebook wall posts customized by this study. (In the strong-tie and high-risk treatment, the subjects saw that products with high prices were
recommended by their strong-tie friends. In the strong-tie and low-risk treatment, the subjects saw that products with low prices were recommended by their strong-tie
friends. In the weak-tie and high-risk treatment, the subjects saw that products with high prices were recommended by their weak-tie friends. In the weak-tie and low-risk
treatment, the subjects saw that products with low prices were recommended by their weak-tie friends.)

of perceived diagnosticity (Mstrong = 5.22 vs. Mweak = 4.96, p < 0.05).
This finding confirms hypothesis H1.
In addition, the interaction between online tie strength and
product-related risks had a significant effect (F = 4.677, p < 0.05).
Table 5 shows the mean and standard deviation for perceived diag-
nosticity, and Fig. 3 is a graphical representation of the results
regarding online tie strength and product-related risks. When the
product’s risk was high, the level of perceived diagnosticity was
higher when the product was recommended by a strong-tie source
than when the product was recommended by a weak-tie source
(Mstrong = 5.31 vs. Mweak = 4.84, p < 0.01). In contrast, when the
product’s risk was low, the difference between the strong-tie and
weak-tie recommendations was not significant (Mstrong = 5.13 vs.
Mweak = 5.09, p = 0.746). This finding supports hypothesis H2.
We analyzed the effects of online tie strength and perceived
diagnosticity on purchase intentions by using a regression analysis
to test H3. Table 6 summarizes the results, which show that per-
ceived diagnosticity was positively correlated with purchase inten-
tions (b = 0.596, p < 0.01), fully mediated the relationship between
online tie strength and purchase intentions, and explained 36.3% of
the variance in purchase intentions. This finding supports hypoth-
esis H3.
6. Discussion and conclusions
SNSs can provide a marketing opportunity. Using the informa-
tion processing theory of consumer behavior, we conducted an
experiment on Facebook to investigate the effects of online tie
strength, perceived diagnosticity, and product-related risks on con-
sumers’ purchase intentions. Our hypotheses were supported by
three experimental results. First, online tie strength is an
important factor in consumer decision making. Consumers tend
 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346 343

to perceive the diagnosticity of product information and recom- with his or her father. We used the frequency of interactions
mendations to be higher if this information is provided by among friends as an objective measure of tie strength because
strong-tie sources. Consumers believe that a strong-tie source doing so allowed us to obtain objective online data. Examining on-
can help them understand and evaluate the quality and perfor- line social relationships through SNSs can help address some of the
mances of products. This finding is consistent with those of previ- limitations in previous studies by utilizing readily available data to
ous studies. For example, Brown and Reingen (1987) and Rogers track online interactions. This study provides empirical evidence
(1995) found that strong ties were more influential than weak ties. suggesting that online social relationship data are important and
In contrast with previous studies, we used the frequency of provide an effective means of analyzing consumer behavior. Addi-
interactions between pairs of people on Facebook to measure the tionally, the evidence indicates that theories about the impact of
strength of their social ties, whereas previous studies have mostly social relationships on traditional WOM communication may be
used self-reports collected through surveys (Brown and Reingen applicable to SNSs.
1987, Duhan et al. 1997, Frenzen and Nakamoto 1993, Wen et al. Second, we found that product-related risks moderate the
2009). We did so because, although a subject may, for example, an- relationship between online tie strength and perceived diagnos-
swer ‘‘Father’’ in response to a question about strong ties on a self- ticity. A moderation effect is often sought if a causal relationship
administered survey, he or she may not have a strong online tie between an independent variable and a dependent variable is
weak or not found empirically (Baron and Kenny 1986, Bennett
2000, Chaplin 1991, Frazier et al. 2004). Results in Table 4 show
Table 3 that the main effect of product-related risks was not significant
Results of the manipulation checks. (F = 0.136, p = 0.713), and the interaction term was significant
Variable Types Percent agreement
(F = 4.677, p < 0.05). Such results reinforce our argument regard-
ing moderation effect of product-related risks. Therefore, prod-
Online tie strength Strong 87.3%
uct-related risks should be considered for studies examining
Weak 76.0%
the effects of social relationships on consumer behavior. Prod-
Product-related risks High 78.9%
uct-related risks affect how consumers search for and evaluate
Low 73.9%
information. Overall, although a strong tie is considered as more
effective than a weak tie, product-related risks matter. If a prod-
uct’s risk is high, then the information and recommendations
Table 4
ANOVA test results for perceived diagnosticity. provided by strong-tie sources have a more significant effect
than the information and recommendations provided by weak-
Source F Sig.
tie sources. However, we did not find this effect when the con-
Online tie strength 6.856 .009** sumers considered low-risk products. As we expected, when the
Product-related risks .136 .713
consumers evaluated products in different risk ranges, they
Online tie strength  Product-related risks 4.677 .031*
underwent different psychological processes (Dowling and Sta-
*
p < 0.05. elin 1994, Payne et al. 1993). Extant researches suggested that
**
p < 0.01.
as risk increases, consumers search for more and more informa-
tion such as word of mouth, advertising, and interpersonal
Table 5 sources to reduce the degree of uncertainty (Dowling and Staelin
Descriptive statistics for perceived diagnosticity. 1994, Garner 1986, Gemiinden 1985). Thus, in a high-risk situa-
tion consumers will be more prone to carefully analyze all the
Mean (N, SD) Online tie strength
information and, as a result, sources’ trustworthiness may help
Strong Weak
overcome these fears and form a more confident opinion about
Product-related risks products (Zhang and Li 2006). In turn, when risk is low, consum-
High 5.31 4.84
ers will be less influenced by sources since they do not need
(107, 0.86) (102, 1.17)
these reinforcements to overcome worry about the possibility
Low 5.13 5.09
of non-desired outcomes (Lian and Lin 2008). This result sheds
(105, 1.05) (106, 0.98)
new light on previous research on tie strength (Wen et al.
2009) because previous studies did not consider the effect of
product risks. The present study shows that product risks mod-
erate the effect of online tie strength on perceived diagnosticity.
Third, the mediators of perceived diagnosticity appeared to be
powerful elements in explaining purchase intentions based on rec-
ommendation sources. Recommendation sources can influence
perceived diagnosticity by determining whether a consumer will
purchase a product. If consumers perceive the diagnosticity of
the positive information that they have about a product to be high,
then their purchase intentions are high. Previous studies have
shown that perceived diagnosticity influences consumer attitudes,
which then lead to purchase intentions (Jiang and Benbasat 2007).
In this study, we did not consider the attitudinal variables and fo-
cused on the direct impact of perceived diagnosticity on purchase
intentions. Indeed, we found that perceived diagnosticity directly
influences purchase intentions. This result supports Fang’s (2012)
findings, which found that perceived diagnosticity directly influ-
ences customers’ transaction intention with a specific seller from
Fig. 3. The interaction between online tie strength and product-related risks.
a website.
344 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346
Table 6
Regression and mediation analysis for purchase intentions.
IV on DV IV on mediators
Purchase intention = a + b Online tie strength Perceived diagnosticity = a + b Online tie strength
Beta Beta
.125* .126*
Note: IV = Independent Variable; DV = Dependent Variable.
*
p < 0.05.
**
p < 0.01.
6.1. Contributions
6.1.1. Theoretical Implications
In this study, we developed a model for investigating the mech-
anisms underlying consumer decision making in the context of
Facebook. We provide empirical evidence showing that online tie
strength, perceived diagnosticity, and product risks play significant
roles in the decision to accept recommendations. Past studies have
examined the effects of tie strength on consumer decision making.
We build on Wen et al.’s (2009) study on the effects of tie strength,
endorser expertise, and product type on purchase intentions. The
results of their study showed that depending on the type of prod-
uct being considered, tie strength and endorser expertise have
varying effects on purchase intentions. However, their study did
not investigate the psychological dimensions of consumers’ infor-
mation processing behaviors. In contrast, we examined the mediat-
ing effects of perceived diagnosticity on the consumer decision-
making process. The resulting model is more descriptive than pre-
vious models because we consider how a consumer’s decision-
making process involves his or her cognitive system while he or
she processes information about the products and sources of prod-
uct information (Bettman 1979, Hoyer and MacInnis 2004).
In addition, the results also contribute to the perceived diag-
nosticity literature. We used the concept of perceived diagnostic-
ity, which represents the extent to which consumers consider
particular shopping experiences as helpful for evaluating prod-
ucts (Kempf and Smith 1998). This concept was extended from
the concept of Jiang and Benbasat (2005). They noted that per-
ceived diagnosticity reflects the perceived ability of a Web inter-
face to convey product information to customers that helps them
understand and evaluate the quality and performance of prod-
ucts. Because Mudambi and Schuff (2010) found that the charac-
teristics of the review have different effects on the information
diagnosticity of that review, they link the concept of information
diagnosticity to online reviews. Previous studies have only ap-
plied the concept of perceived diagnosticity to the information
derived from sellers’ Web interfaces and online reviews (Jiang
and Benbasat 2005, Mudambi and Schuff 2010). Our findings ex-
tend the literature (Jiang and Benbasat 2005, Kempf and Smith
1998, Mudambi and Schuff 2010) on information diagnosticity
by applying the concepts to recommendations and information
provided by SNS contacts that differ from the information exam-
ined by existing studies.
6.1.2. Managerial implications
Our findings will increase the companies’ understanding of the
role that social ties play in consumers’ decision-making processes.
This study found that social connections on SNSs can influence
consumer purchasing decisions. Social ties help increase the per-
ceived diagnosticity of information. The results of this study can
be used to develop guidelines for creating more effective market-
ing strategies.
For marketing companies, our results imply that a message
from a strong-tie friend has a powerful influence on consumer
IV on DV with proposed mediators
Purchase intention = a + b1 Online tie strength + b2 Percevied diagnosticity
Online tie strength Perceived diagnosticity
Beta Beta
.050 .596**
decision making. Companies can choose appropriate users to rec-
ommend a specific product to their friends. In doing so, it is hoped
that these users enhance their friends’ purchase intentions. For
example, companies can give their new product to the target con-
sumers’ strong-tie friends and require them to recommend the
product to their friends. In this way, the company can help con-
sumers to evaluate the product and create interest among poten-
tial users. In many cases, offering free products to the right group
of people may be less expensive than traditional advertising. Our
results also suggest that marketers should consider different strat-
egies, depending on whether a product’s risks are high or low. For
high-risk products, companies should invite individuals who have
strong ties with the targeted consumers to recommend the compa-
nies’ products to these consumers. For low-risk products, social
relationships have less influence on consumer purchasing deci-
sions. The recommendations from a weak-tie friend are just as
influential as from a strong-tie friend. Furthermore, we found that
for low-risk products, perceived diagnosticity of the information
from both strong-tie and weak-tie friends is high (mean > 5).
According to such results, it would seem that SNSs are the excel-
lent platforms to promote low-risk products because the majority
of SNSs’ friends are weak-tie friends rather than strong-tie friends.
Marketers can use SNS platforms to promote low-risk products.
For SNSs, our results show that social information is valuable
data. Social information is important and provides an effective
way to analyze consumer behavior. Using such information, com-
panies can make highly targeted, relevant, and social marketing
strategies. We suggest that SNSs can gather data on social relation-
ships, such as friend lists and interaction histories, to create social
information-based products. Besides, SNSs can also position them-
selves as a platform for social commerce, allowing it to facilitate
social buying on a level never before seen. This could generate
money for the company while making the buying process easier
for consumers and sellers. Facebook opened its IPO in May, 2012.
However, the earnings of Facebook are not as expected so the stock
price quickly fell. Analysts worried that too many users are access-
ing Facebook on mobile devices now, resulting in lower growth
rates for ad revenues as well as reduced operating profits. There
are a lot of questions about the efficacy and future of Facebook’s
ad-dominant revenue model. Facebook should monetize through
another business model apart from advertising. According to our
results, Facebook has plenty of revenue options beyond advertis-
ing. Facebook has access to more information about consumers’
demographics, interests, and social networks than any other com-
panies. It could create the social commerce platform and sell data
analytics products. It is a challenge and an opportunity as well for
Facebook in identifying effective ways to generate more revenue
streams. In addition, as people are increasingly daunted by the
sheer amount of data available on the Facebook, the term ‘‘Face-
book fatigue’’ is being mentioned. SNSs should continue to address
the issue of information overload that some people sometimes
experience. According to our findings, recommendation informa-
tion issued from a strong-tie friend carries more weight than
from a weak-tie friend. We suggest that SNSs should create a
 J.-C. Wang, C.-H. Chang / Electronic Commerce Research and Applications 12 (2013) 337–346 345

mechanism to help consumers filter the usefulness of information
and to identify interesting messages from their social circles. Be-
cause thousands of messages appear on users’ review pages, most
of the messages may be ignored. By using social tie data and filter
mechanisms, consumers can find the interesting messages quickly,
and companies can easily find their target customers.
purchase a product due to homophily, companies would just seg-
ment the market based on observable preferences. Future studies
could emphasize in distinguishing the effect of influence and hom-
ophily on purchase intentions.
Appendix A. Questionnaire items in constructs

6.1.3. Methodological implications

Prior research has more often used self-reported surveys in- Construct Sources Measurement items
stead of real interaction data to measure the strength of social ties Perceived Kempf and  The recommendations
(Brown and Reingen 1987, Duhan et al. 1997, Frenzen and Nakam- diagnosticity Smith (1998) helped me evaluate the
oto 1993, Wen et al. 2009). This study provides a new approach to and Jiang and products.
measuring online tie strength by collecting users’ interaction data Benbasat  The recommendations
from SNSs. SNSs allow companies to easily identify target custom- (2005, 2007) helped me judge the
ers and gather large quantities of information about these consum- quality of the products.
ers (e.g., sex, education level, and age). This method provides new  The recommendations
research opportunities (Lewis et al. 2008), allows us to bypass the helped me assess the
problem of accuracy that emerges while using retrospective infor- performances of the
mation provided by informants (Bernard et al. 1984, Marsden products.
1990), and demonstrates that data collected through websites Purchase Coyle and  It is likely that I will buy
can be useful to marketing companies. In addition, because we intentions Thorson the recommended
pursued our study in a realistic Facebook environment, we were (2001) products.
better able to gauge the consumers’ actual reactions and opinions.  I will purchase the
recommended products
6.2. Limitations and future research the next time I need
snacks.
This study was somewhat limited by its experimental design.  If a friend called me to
The mental processes involved in assessing information diagnos- get my advice about
ticity are part of an overall experience. Consumer decision making which snacks to buy, I
may be affected by various factors, such as prior experience, prior would advise them to buy
attitudes, product preferences, new product information and eval- the recommended
uations of the sources of this information. Future studies should products.
consider the effects of individual characteristics, such as product  I will definitely buy the
preferences, product knowledge, and personal involvement. This recommended products.
study demonstrates that perceived diagnosticity has a direct effect  I have strong intentions
on purchase intentions. Future research is encouraged to investi- to purchase the
gate other possible mediators such as attitudes toward products recommended products.
that may enhance the association between perceived diagnosticity
and purchase intention.
Additionally, this study did not examine the effects of negative
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