Topic: Assessing the Effectiveness of Live Chat on Conversion Probability: Evidence from an Online Marketplace

Speaker: Prof .FAN Ming, University of Washington

Host: Prof. QU Wenguang

Tim: 13:30-15:00 November 30th, 2016 (Wednesday)

Venue: Room 1002

Abstract: This study examines how online sellers’ use of live chat influences their conversion probability. We argue that live chat manages to increase conversion probability by performing the function of “inform” and “persuade.” We further explore whether and how this effect is contingent on other factors related to consumer decision making, while accounting for the effort level of sellers. We apply a random coefficient model in a Bayesian hierarchical framework, and test the model using a panel dataset from Taboao—the giant e-commerce platform in China. Our results suggest that live chat in general has a positive impact on conversion probability, and the positive impact is stronger when product information on webpage is not comprehensive and when consumer perceive higher utility from seller products.