ABSTRACT
Before forming choices and arriving at purchase decisions, consumers explore how the majority of like-minded consumers within a certain community are reviewing the product, especially when they themselves possess incomplete knowledge about the product type or class. Consumers choose to participate in social media communities based on their perceived utility of being a member in the community. This helps them form perceptions and make decisions based on the induced interactions within the community. In a nutshell, utility based model provides us with an economic explanation of how consumer choices are formed based on private and social utilities associated with a binary choice in a social community. Although in large online communities a social network is formed in a way where all individuals interact with each other, there are other forms of network formation which need mention as well. In order to understand how dynamic social interactions work, we can think of social interactions as a strategic dynamic game of choices.
