Increasing Capital Revenue in Social Networking Communities: Building Social and Economic Relationships through Avatars and Characters

Increasing Capital Revenue in Social Networking Communities: Building Social and Economic Relationships through Avatars and Characters

Jonathan Bishop (Glamorgan Blended Learning Ltd. & The GTi Suite & Valleys Innovation Centre & Navigation Park & Abercynon, UK)
DOI: 10.4018/978-1-60566-104-9.ch004

Abstract

The rise of online communities in Internet environments has set in motion an unprecedented shift in power from vendors of goods and services to the customers who buy them, with those vendors who understand this transfer of power and choose to capitalize on it by organizing online communities and being richly rewarded with both peerless customer loyalty and impressive economic returns. A type of online community, the virtual world, could radically alter the way people work, learn, grow consume, and entertain. Understanding the exchange of social and economic capital in online communities could involve looking at what causes actors to spend their resources on improving someone else’s reputation. Actors’ reputations may affect others’ willingness to trade with them or give them gifts. Investigating online communities reveals a large number of different characters and associated avatars. When an actor looks at another’s avatar they will evaluate them and make decisions that are crucial to creating interaction between customers and vendors in virtual worlds based on the exchange of goods and services. This chapter utilizes the ecological cognition framework to understand transactions, characters and avatars in virtual worlds and investigates the exchange of capital in a bulletin board and virtual. The chapter finds strong evidence for the existence of characters and stereotypes based on the ecological cognition framework and empirical evidence that actors using avatars with antisocial connotations are more likely to have a lower return on investment and be rated less positively than those with more sophisticated appearing avatars.
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Introduction

The rise of online communities has set in motion an unprecedented power shift from goods and services vendors to customers according to Armstrong and Hagel (1997). Vendors who understand this power transfer and choose to capitalize on it are richly rewarded with both peerless customer loyalty and impressive economic returns they argue. In contemporary business discourse, online community is no longer seen as an impediment to online commerce, nor is it considered just a useful Web site add-on or a synonym for interactive marketing strategies. Rather, online communities are frequently central to the commercial development of the Internet, and to the imagined future of narrowcasting and mass customization in the wider world of marketing and advertising (Werry, 2001). According to Bressler and Grantham (2000), online communities offer vendors an unparalleled opportunity to really get to know their customers and to offer customized goods and services in a cost executive way and it is this recognition of an individual’s needs that creates lasting customer loyalty. However, if as argued by Bishop (2007a) that needs, which he defines as pre-existing goals, are not the only cognitive element that affects an actor’s behavior, then vendors that want to use online communities to reach their customers will benefit from taking account of the knowledge, skills and social networks of their customers as well.

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