Increasing Capital Revenue in Social Networking Communities

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.