Understanding the Dynamic Process among Internal Online Word-of Mouth,External Online Word-of Mouth and Online Sales based on Hierarchical Bayesian Model

Unlike traditional studies, which take the internal online word of mouth, external online word of mouth or both as research objects to study the relationship between word of mouth and online sales, this paper, based on the Review Environment Theory, studied the dynamic interaction between internal & external online word of mouth and online sales, using the hierarchical Bayesian model and taking the Dangdang, Jingdong, Amazon and Douban as research objects, by introducing the factor of free sampling and considering the heterogeneity and diversified sources of online word-of-mouth. The results are as follows:when there is little difference between valence and the heterogeneity of online word-of-mouth, valence is no longer the key factor for online sales. The volume of internal word-of-mouth and the entropy of word-of-mouth are the key factors influencing online sales and online sales promote the volume of internal word of mouth. Though the external word-of-mouth negatively undermines the interplay between internal word-of-mouth and online sales, the free sampling negatively moderates this mechanism.