Neurophysiological effect of exposure to gossip on product endorsement and willingness-to-pay.

With the proliferation of social networking sites, it is common to encounter gossip and product endorsement from different social influences (friends, strangers or celebrities) in the same context. This research examines gossip as a facilitator of reputational social exchange, and shows that exposure to gossip moderates the social influence of product endorsement. Participants read positive and negative gossip about different endorsers, and event-related potentials (ERPs) were recorded during product endorsement. Behavioral results indicate that gossip about a close friend or celebrity (relative to a stranger) and positive (vs. negative) gossip increase consumer willingness-to-pay following product endorsement respectively. ERP results reveal two distinct ERP components following exposure to gossip. During the late stage (350-500 ms) of product endorsement, exposure to gossip about a close friend (relative to celebrity or a stranger) and negative (relative to positive) gossip each elicited a distinctively larger N400 response. During the later stage (500-700 ms), positive (versus negative) gossip elicited a larger LPP during friend endorsement relative to celebrity endorsement. The findings illustrate the motivational significance of gossip about friends from a social learning perspective. We also discuss the marketing implications for friend endorsement versus celebrity endorsement.