A holistic assessment of eWOM management effectiveness with agent-based modeling

Abstract

Purpose

Hospitality businesses have been challenged to pick fitting electronic word-of-mouth (eWOM) management strategies, yet accurate return on investment assessments and contextual contingencies interpretation essential for leveraging eWOM power are largely absent. This study aims to fill these gaps and develop a tool aiming at more holistic and accurate eWOM management assessment.

Design/methodology/approach

An agent-based model is developed based on eWOM-related hospitality/business theories and empirical evidence on the NetLogo 6.0.2 platform, wherein a series of simulated experiments are conducted.

Findings

Simulation patterns suggest that conformity to the majority’s choice of eWOM usage can be beneficial for consumption satisfaction, yet conformity to a group’s eWOM posting choice can compromise satisfaction. Compared to the brief reputation-boosting benefit of exaggerated advertising, honesty in advertising is preferable given its compatibility with competing eWOM distribution and long-term reputation benefits.

Practical implications

A preliminary tool is developed for hospitality businesses that aids the clearer interpretation of and more accurate/cost-efficient assessment of effectiveness in managing eWOM distribution. Generic directions for improved eWOM management are also provided.

Originality/value

A prototype model is established that surpasses existing models in its ability to capture the complexity of eWOM management and more accurately assess management effectiveness. The authors also reveal emerging novel patterns concerning the interactive dynamics of eWOM behaviors and contextual influences. The research also adds to the scarce agent-based model applications in hospitality research/practices and recommends future potential applications.

Citation

Zhang, Y., Gao, J., Bilgihan, A. and Lorenz, M. (2023), "A holistic assessment of eWOM management effectiveness with agent-based modeling", International Journal of Contemporary Hospitality Management, Vol. 35 No. 3, pp. 785-827. https://doi.org/10.1108/IJCHM-01-2022-0106