Users’ processing of online marketplace listings for high and low involvement goods

Purpose – To understand how users of online marketplaces process market signals in their decision making and whether this depends on if the good is of high or low involvement.Design/methodology/approach – The paper employs a mixed methods approach. Study 1 draws on an analysis of interviews with online marketplace users using hypothetical eBay purchases as stimuli, understanding how users conceptualize specific market signals and whether their importance varies depending on the type of purchase (high versus low involvement good). Study 2 tests hypotheses derived from signaling theory, using an eye tracking experiment.Findings – Price and photographs act as “fast and frugal” signals for inclusion in consideration sets for low involvement purchases, but consumers deem them insufficient for high involvement purchases where high-cost signals that help establish seller credibility are far more salient. Users pay relatively greater attention to costly market signals, which are beyond sellers’ direct control, for high involvement goods.Practical implications – The paper offers insights for sellers regarding the presentation of quality cues and strategies online marketplaces can employ to reduce information asymmetry.Originality/value – Drawing on and extending signaling theory, the paper introduces and confirms hypotheses for understanding users’ attention to market signals when making purchase decisions on online marketplaces. It identifies how the degree of involvement of a product affects the processing of market signals.<br/

Users’ processing of online marketplace listings for high and low involvement goods

Purpose: To understand how users of online marketplaces process market signals in their decision making and whether this depends on if the good is of high or low involvement. Design/methodology/approach: The paper employs a mixed methods approach. Study 1 draws on an analysis of interviews with online marketplace users using hypothetical eBay purchases as stimuli, understanding how users conceptualize specific market signals and whether their importance varies depending on the type of purchase (high versus low involvement good). Study 2 tests hypotheses derived from signaling theory, using an eye tracking experiment. Findings: Price and photographs act as “fast and frugal” signals for inclusion in consideration sets for low involvement purchases, but consumers deem them insufficient for high involvement purchases where high-cost signals that help establish seller credibility are far more salient. Users pay relatively greater attention to costly market signals, which are beyond sellers’ direct control, for high involvement goods. Practical implications: The paper offers insights for sellers regarding the presentation of quality cues and strategies online marketplaces can employ to reduce information asymmetry. Originality/value: Drawing on and extending signaling theory, the paper introduces and confirms hypotheses for understanding users’ attention to market signals when making purchase decisions on online marketplaces. It identifies how the degree of involvement of a product affects the processing of market signals

Buy it now: A hybrid market institution

This paper analyzes seller choices and outcomes in approximately 700 Internet auctions of a relatively homogeneous good. The ‘Buy it Now’ option allows the seller to convert the auction into a posted price market. We use a structural model to control for the conduct of the auction as well as product and seller characteristics. In explaining seller choices, we find that the ‘Buy it Now’ option was used more often by sellers with higher ratings and offering fewer units; and posted prices were more prevalent for used items. In explaining auction outcomes, we find that auctions with a ‘Buy it Now’ price had higher winning bids, ceteris paribus, whether or not the auction ended with the ‘Buy it Now’ offer being accepted, possibly reflecting signaling or bounded rationality. We also find that posting prices, by combining ‘Buy it Now’ and an equal starting price, was an effective strategy for sellers in the sample.Market institutions; posted prices; auctions; e-commerce

Social Media’s impact on Intellectual Property Rights

This is a draft chapter. The final version is available in Handbook of Research on Counterfeiting and Illicit Trade, edited by Peggy E. Chaudhry, published in 2017 by Edward Elgar Publishing Ltd, https://doi.org/10.4337/9781785366451. This material is for private use only, and cannot be used for any other purpose without further permission of the publisher.Peer reviewe

Reputation and pricing strategies in online market

Although pricing strategy in marketing is a crucial issue, there islittle literatureon the relationship between pricing and sellers’ reputation based on dynamic pricing data. Using data on Taobao.com, we compare pricing behaviors of two types of sellers, business sellers (T-Mall sellers) which have higher reputation and individual sellers (Tao sellers) which have relatively lower reputation. We findthat sellers with different reputation levels will choose different pricing strategies and high-reputation sellers will have advantages in pricing. More specifically, our results reveal thatwhen a T-Mall seller enters into a market as a new extant it will be more likely to sethigher initial price than a Tao seller. In addition the magnitudes of price adjustments of Tao sellers have significant correlation with price changes in T-Mall market.On contrary, prices changes of T-mall sellers are not influenced by price changes in Tao market

How much should I invest? The influence of reputable investors and platform investors in online lending

This paper draws on signaling theory to examine the joint effects of platform investment and investment of reputable investors on the investment behavior of ordinary investors in online lending. We tested our hypotheses with a dataset of 2,276,380 bidding records pertaining to 46,140 loans posted on an online lending platform. Our results show that (1) The investment of reputable investors as a quality signal can increase the investment amount of subsequent investors. (2) Platform investment signal and reputable investment signal are complementary. In the loan projects with platform investment (compared to those without), investment of reputable investors exerts greater influence on the investment amount of subsequent investors. (3) Focusing on loan projects with platform investment, the investment of reputable investors has greater impact on the investment amount of subsequent investors after the platform investment. This paper offers important theoretical and practical implications

It\u27s only pixels, badges, and stars: On the economic value of reputation on Airbnb

Trust is a crucial prerequisite for peer-to-peer rental and sharing. Therefore, platform operators such as Airbnb have implemented a host of trust-building mechanisms, user interface (UI) artefacts, and reputation systems. While the role of reputation systems for establishing trust is well understood, little is known about how reputation translates into tangible economic value. We thus consider the economic value of trust artefacts on Airbnb by quantifying price effects of common reputation features from a signalling theory perspective. Our analysis is based on a large-scale dataset from 86 German cities and hedonic price modelling. We find that index signals such as the hosts\u27 rating scores, duration of membership, and Superhost status provide economic value. Moreover, also conventional signals such as a high number of accommodation photographs consistently translate into price premiums. We discuss implications for platform operators, users, and the general design of IS artefacts intended to facilitate peer-to-peer platform interactions