Electronic Commerce Research - Editor's Pick

• Beware of the Woozle effect and belief perseverance in the PLS-SEM literature!
  Jörg Henseler, Nick Lee, Ellen Roemer, Ildikó Kemény, Taşkın Dirsehan & John W. Cadogan
  (Open access Published: 25 June 2024)
  
  "The academic literature surrounding Partial Least Squares Structural Equation Modeling (PLS-SEM) includes various inaccuracies that misrepresent the capabilities and characteristics of the method. This research delves into the reasons behind the persistence and propagation of these misstatements. The authors analyze how a series of inaccuracies, omissions, and repeated misconceptions, along with the introduction of new errors, contribute to what they define as the "Woozle Effect." This effect describes a cumulative process whereby erroneous statements gain unwarranted credibility and acceptance as fact. Specifically, the research scrutinizes the application of PLS-SEM in estimating parameters for reflective measurement models to illustrate this phenomenon. The "Woozle Effect" essentially highlights a breakdown in the self-correcting nature of scientific inquiry, leading to the establishment of false beliefs within the academic community. This examination aims to clarify these misconceptions and reinforce the methodological integrity of PLS-SEM within the scholarly discourse."
   
• Is Bitcoin ready to be a widespread payment method? Using price volatility and setting strategies for merchants
  Simona-Vasilica Oprea, Irina Alexandra Georgescu & Adela Bâra
  (Published: 05 February 2024)
  
  "Bitcoin has progressively emerged as a viable payment option, offering the advantage of minimal to zero fees in international transactions, unlike traditional electronic payments made in dollars or euros. As cryptocurrencies become more integrated into mainstream commerce, Bitcoin's role in e-commerce has notably expanded. This paper presents an analysis of Bitcoin's price evolution from September 2014 to July 2023, exploring the factors contributing to its price volatility and projecting its future fluctuations.
  
  To assess and predict Bitcoin’s price volatility, we employ Autoregressive Conditional Heteroskedasticity (ARCH) models and their extensions. The Generalized ARCH model (GARCH) improves upon basic ARCH models by capturing more persistent volatility patterns. Our study further extends this analysis by estimating symmetric and asymmetric GARCH (1,1) models, which incorporate both normal and non-normal innovations. Among these, the Exponential GARCH (EGARCH) model with t-distribution innovation emerges as the most effective.
  
  For merchants considering the adoption of Bitcoin as a payment method, understanding tools like the EGARCH model and Value at Risk (VaR) is crucial. The EGARCH model forecasts financial asset volatility, while VaR is a risk management strategy that estimates potential portfolio losses over a defined period, helping merchants gauge the maximum expected loss. Our findings indicate that at a 5% probability level, the VaR coverage is 0.044, suggesting a 95% confidence level that the loss would not exceed 4.4% of the investment value. This analysis is instrumental for merchants in making informed decisions about incorporating Bitcoin into their business operations."
   
• Acting on impulse: the role of emotion, gender identity and immersion in driving impulse behavior
  Kai-Yu Wang, Abdul Ashraf, Narongsak Thongpapanl, Caitlin Ferreira, Cem Selcuk & Todd Green
  (Published: 24 May 2024)
  
  "This study explores the impact of virtual reality (VR) environments on consumer impulse buying behavior, an area that has not been extensively researched within the context of immersive retail settings. The research design focuses on analyzing the interplay among the level of immersion, gender identity, and emotional state of the consumer. Findings from this study indicate that both the emotional state and gender identity significantly influence impulse buying behaviors in a high-immersion VR environment, as opposed to a low-immersion 2D environment.
  
  The study provides valuable insights into how emotional appeals can affect consumer decisions in environments characterized by high levels of immersion. It underscores the importance of considering consumer well-being, suggesting the implementation of safeguards to mitigate potential negative impacts on consumers navigating these immersive spaces. This research contributes to a deeper understanding of the dynamics of consumer behavior in digital and immersive retail landscapes, offering implications for both academic researchers and practitioners in the design and management of VR platforms."
   
• Let’s join forces: boundary resources as enablers of value co-creation in e-commerce ecosystems
  Tobias Wulfert, Gero Strobel & Hiep Hoang
  (Open access Published: 03 May 2024)
  
  "Collaboration and value co-creation are pivotal to the ongoing expansion of the e-commerce sector, which is projected to achieve a market value of $6.4 trillion by 2024, despite ongoing global challenges. Currently, a limited number of transaction platforms, such as Amazon and Walmart, dominate the e-commerce landscape. However, it is anticipated that additional participants will integrate into these platforms' ecosystems. In this context, third-party developers play a crucial role by enhancing platform functionality through extensions, yet their contribution to the success and generativity of e-commerce ecosystems is relatively underexplored in academic research.
  
  This study delves into the effectiveness of boundary resources for attracting and managing third-party developers within e-commerce ecosystems. Based on qualitative data collected from interviews with 14 domain experts, the research has led to the development of seven design principles. These principles are designed to guide the strategic use of boundary resources by owners of innovation and transaction platforms in the e-commerce industry.
  
  The implementation of these design principles is expected to significantly improve collaboration, value creation, and the generative capacity of e-commerce ecosystems, thereby enhancing their overall success. This framework offers a strategic approach to fostering more inclusive and dynamic e-commerce environments."
   
• The impact of past fundraising experiences on the fundraising performance of equity crowdfunding projects
  Xue Yang, Huiling Wang & Fangyue Li
  (Published: 24 February 2024)
  
  "Small and medium-sized enterprises (SMEs) are pivotal to technological innovation but often face challenges securing financial support. In this context, equity crowdfunding has emerged as a significant avenue for SMEs to raise funds. Our study focuses on the influence of undisclosed information, particularly previous fundraising experiences, on the performance of crowdfunding campaigns. Utilizing data from all successful projects on Seedrs, an equity crowdfunding platform, we specifically analyzed the effects of past fundraising experiences on current fundraising outcomes.
  
  Our empirical investigation assessed three dimensions: the presence of past fundraising activities, the frequency of these past activities, and the amount raised in the most recent campaign. We evaluated their impact on two key metrics: the fundraising ratio (amount raised versus target) and the number of investors attracted.
  
  The findings reveal that while the fundraising ratio does not significantly correlate with the presence or frequency of past fundraising, it is positively influenced by the amount raised in the most recent campaign. Conversely, the number of investors is not significantly affected by the mere presence of past fundraising activities but is positively influenced by the frequency of these activities and negatively by the amount raised last.
  
  Theoretically, our research enriches the understanding of how non-disclosed information, specifically past fundraising performance, affects current fundraising success. Practically, it sheds light on investor information-seeking behaviors, offering insights for crowdfunding platforms on optimizing information display to enhance fundraising effectiveness."
   
• Understanding the user perception of digital nudging in platform interface design
  Fabia Marie Hettler, Jan-Philip Schumacher, Eduard Anton, Berna Eybey & Frank Teuteberg
  (Open access Published: 18 March 2024)
  
  "Understanding user perceptions of digital nudges remains relatively unexplored. Our study aims to fill this gap by examining key factors such as perceived usefulness, ease of use, trust, and privacy risks. We conducted an online experiment with 273 participants to evaluate the effects of various digital nudging interventions—specifically, social norms, defaults, and scarcity warnings—compared to a control group. Using both descriptive and inferential statistical methods, our findings reveal significant variations in trust between groups exposed to default settings and scarcity warnings and the control group.
  
  To further validate and interpret these results, we engaged 11 experts from the fields of information systems and psychology in a series of interviews. The insights gained from these discussions have significantly enriched our understanding of digital nudges within the e-commerce landscape, providing valuable design recommendations.
  
  The theoretical contributions of our research offer propositions to enhance user involvement and suggest conducting complementary narrative research along with analyzing the impacts of nudging at various time points. From a practical standpoint, we emphasize the importance of highlighting user autonomy in decision-making processes and clarify that defaults and scarcity warnings are strategically designed to counteract inherent cognitive biases. This dual approach not only informs users but also integrates nudging techniques with boosting elements to optimize e-commerce strategies."

J. Christopher Westland

Editor-in-Chief

Electronic Commerce Research