Understanding the User’s Economical and Psychological Intentions to Snatch Electronic Red Envelopes: An Experimental Study

Abstract

As a new social phenomenon occurring during the Spring festival in recent years in China, snatching ''WeChat red envelopes'' fever has swept the country. The high popularity of WeChat red envelopes is unusually interesting because of individuals' behavior reflects a trade-off between concerns for the economic consequences and the psychological consequences. Why people prefer to WeChat red envelopes rather than cash envelopes, even when the latter delivery higher economic benefits? Understanding some of the rules governing customers' decision making that affect their preferences regarding the WeChat online red envelopes activities is meaningful. This paper documents the motivations of people for receiving and giving WeChat red envelopes. It constructs and tests four hypotheses to explore these motivations. Three studies are then conducted, which show that the individuals' motivations to snatch red envelopes are influenced by luck-chasing preference, mental accounting effect, motivating-uncertainty effect, and reference dependence. Specifically, individuals tend to pay more attention to the psychological consequences than that to the economic consequences of snatching WeChat red envelopes. Based on these results, theoretical and practical implications are provided. INDEX TERMS WeChat red envelope, mental accounting, motivating-uncertainty effect, reference dependence.

The red packet interaction and brand attitude in the brand communities on WeChat

“…The influence of red packet interactions on consumers' brand attitude is tested. In general, the results confirm the effect of red packets in facilitating community interaction suggested by past research (Zhang et al, 2019;Wu and Ma, 2017;Yuan et al, 2017). Further examinations show that relative to CRPIs, ERPIs induce a less favorable brand attitude, and the observed difference can be explained by normative community pressure.…”

“…Out of reciprocity, recipients might post responses, for example, thanking the sender, meeting his/her following demands or discussing the luckiest draw. Second, as a simplified multiplayer game, the red packet interaction improves group participation (Zhang et al, 2019). Members race to snatch limited chances to obtain possible rewards, enjoying the entertainment of competition and uncertainty (Kow et al, 2017).…”

“…Therefore, the impact of the red packet interaction type on the intention to grab red packets was insignificant. Second, prior research has indicated that distributing red packets enhances user participation (Zhang et al, 2019). Both ERPIs and CRPIs are based on the condition that brands have sent red packets.…”

“…As a means of consumer incentives in brand communities, red packets could be a double-edged sword. Previous research suggests that sending red packets contributes to user engagement and community participation (Zhang et al, 2019;Wu and Ma, 2017;Yuan et al, 2017). By engaging consumers in competitive activities, gamified incentives can foster a favorable brand attitude (Yang et al, 2017).…”

“…Explicit cash rewards make red packets more attractive to consumers than conventional incentives. More importantly, red packet interactions involve gamification components: the competition for limited red packets and the uncertainties of who will grab the red packets and how much money they contain (Zhang et al, 2019). Red packets have an advantage over conventional incentives in stimulating timely interactions.…”