Online Communities Carry Risks

Researchers say participation in an online community influences people to make riskier choices and behave in riskier ways.

Online community groups are enticing because the members share common interests. But they also can cause people to make risky financial decisions.

The reason: active community members believe if their risky behavior backfires, the community will come to their rescue -- which, in reality, isn't likely.

That’s according to a recent study authored by a quartet of professors from three universities.

According to the researchers, this study is the first to show that participation in an online community influences a person's financial decision-making in a systematic way, leading them to make riskier choices and behave in riskier ways.

Taking risks because you believe your virtual buddies will cushion any bad outcomes is a bad idea, warned the researchers -- Rui Zhu and Utpal M. Dholakia, of Rice University; Xinlei Chen, of the University of British Columbia; and René Algesheimer, of the University of Zurich.

Online bonds are much more tenuous than those found in the real world, the study explained. Members of online communities will likely not know each other offline and have no connections other than their virtual relationship. "Indeed, in many cases, they might not even know the real names or geographic locations of these individuals," the study said.

"Thus," it continued, "online community members are unlikely to offer actual financial assistance, such as a loan or a gift of money, to community participants when negative outcomes occur as a result of their financial decisions."

A moderating influence on a community member's risky behavior is how active they are within a community. If a member isn't very active in the community, they're less likely to engage in the riskier behaviors of active members, the study found.

The researchers looked at three settings.

One was, a peer-to-peer online lending community, which has 1.11 million members and has created $249 million in personal loans. After tracking a group of 600 Prosper members -- some in communities, some not -- the researchers found that, over an 18-month period, community members engaged in riskier financial behavior than non-members.

Another setting was eBay in Germany. There, for 22 months, the researchers studied the behavior of 13,735 customers with an interest in collectibles -- stamps, coins, books, art and toys. Again, they found riskier behavior by community members compared to non-community members, as measured by the number of bids placed on an item and amounts paid for an item.

A lab was used for the third setting. It allowed researches to test in a more controlled environment what they learned from the other settings.

The researchers noted that their study has implications beyond financial decision-making.

It “raises the possibility that joining an online support group sponsored by a hospital, foundation, or advocacy group may make patients choose riskier treatments or courses of action," they said. "Similarly, members of an online (or offline) adolescent club may become more likely to engage in high-risk behaviors, some of which may be detrimental, relative to comparable non-members."

Follow freelance technology writer John P. Mello Jr. and Today@PCWorld on Twitter.

Join the CSO newsletter!

Error: Please check your email address.

Tags online securityInternet-based applications and servicesweb legal issuesresearchonline privacyConsumer Advicesocial networkingRice Universitysocial networksfinancial sitesinternet

More about eBayRice University

Show Comments

Featured Whitepapers

Editor's Recommendations

Solution Centres

Stories by John P. Mello Jr.

Latest Videos

  • 150x50

    CSO Webinar: The Human Factor - Your people are your biggest security weakness

    ​Speakers: David Lacey, Researcher and former CISO Royal Mail David Turner - Global Risk Management Expert Mark Guntrip - Group Manager, Email Protection, Proofpoint

    Play Video

  • 150x50

    CSO Webinar: Current ransomware defences are failing – but machine learning can drive a more proactive solution

    Speakers • Ty Miller, Director, Threat Intelligence • Mark Gregory, Leader, Network Engineering Research Group, RMIT • Jeff Lanza, Retired FBI Agent (USA) • Andy Solterbeck, VP Asia Pacific, Cylance • David Braue, CSO MC/Moderator What to expect: ​Hear from industry experts on the local and global ransomware threat landscape. Explore a new approach to dealing with ransomware using machine-learning techniques and by thinking about the problem in a fundamentally different way. Apply techniques for gathering insight into ransomware behaviour and find out what elements must go into a truly effective ransomware defence. Get a first-hand look at how ransomware actually works in practice, and how machine-learning techniques can pick up on its activities long before your employees do.

    Play Video

  • 150x50

    CSO Webinar: Get real about metadata to avoid a false sense of security

    Speakers: • Anthony Caruana – CSO MC and moderator • Ian Farquhar, Worldwide Virtual Security Team Lead, Gigamon • John Lindsay, Former CTO, iiNet • Skeeve Stevens, Futurist, Future Sumo • David Vaile - Vice chair of APF, Co-Convenor of the Cyberspace Law And Policy Community, UNSW Law Faculty This webinar covers: - A 101 on metadata - what it is and how to use it - Insight into a typical attack, what happens and what we would find when looking into the metadata - How to collect metadata, use this to detect attacks and get greater insight into how you can use this to protect your organisation - Learn how much raw data and metadata to retain and how long for - Get a reality check on how you're using your metadata and if this is enough to secure your organisation

    Play Video

  • 150x50

    CSO Webinar: How banking trojans work and how you can stop them

    CSO Webinar: How banking trojans work and how you can stop them Featuring: • John Baird, Director of Global Technology Production, Deutsche Bank • Samantha Macleod, GM Cyber Security, ME Bank • Sherrod DeGrippo, Director of Emerging Threats, Proofpoint (USA)

    Play Video

  • 150x50

    IDG Live Webinar:The right collaboration strategy will help your business take flight

    Speakers - Mike Harris, Engineering Services Manager, Jetstar - Christopher Johnson, IT Director APAC, 20th Century Fox - Brent Maxwell, Director of Information Systems, THE ICONIC - IDG MC/Moderator Anthony Caruana

    Play Video

More videos

Blog Posts