The growing influence of social and digital media: Impact on consumer choice and market equilibrium.

Purpose The purpose of this paper is to devise and then test a theoretical model to illustrate the effects of the increasing importance of social media on consumer behavior and market equilibrium in differentiated food industries. Design/methodology/approach The authors use game theory to model the strategic use of social media by firms producing high-value food products. The authors test the predictions of the theoretical model by means of a survey of 722 randomly selected Italian food consumers using an online questionnaire. Findings The model predicts that, as social media become more and more influential, consumers using the new media become more informed, and their concern about food quality attributes increases. At the same time, the consumers using mass media only receive less information and they prefer cheaper products to the high value one. As a result, the emergence of social media favours market segmentation and the hypotheses tested were: Social consumers are, on average, more informed than mass consumers and more concerned about environmental issues than mass consumers. The data support the theoretical model. Originality/value The paper contributes to the debate about the impact of information from interested sources on market equilibrium, providing an innovative analysis of the role of social media.