Social Influence, Competition, and Free Riding: Examining Seller Interactions Within an Online Social Network

Online social networks are increasingly being used to conduct commercial activities, and many online social networking platforms allow users to sell products to their online connections. Although extensive research has been conducted on the interactions among buyers within a social network, interactions among sellers have rarely been explored. Using seller data from a company that sells on a major online social networking platform in China, we empirically examine how sellers’ efforts and sales performance are affected by the efforts and sales performance of other sellers they are connected to (i.e., their inviters and invitees) and the commissions they themselves have received. We find evidence for social influence and competition effects in the “inviter-to-invitee” direction and sellers’ free-riding behavior driven by the commissions they receive from their invitees’ sales. These results extend the social network literature that has largely focused on connected buyers (or users) to connected sellers and offer implications for social networking platforms to promote seller participation.