Signaling theory and information asymmetry in online commerce from the seller and buyer perspectives
Item
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Title
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Signaling theory and information asymmetry in online commerce from the seller and buyer perspectives
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Identifier
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d_2009_2013:1a508486b969:11446
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identifier
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11918
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Creator
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Mavlanova, Tamilla,
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Contributor
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Raquel Benbunan-Fich
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Date
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2012
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Language
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English
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Publisher
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City University of New York.
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Subject
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Marketing | Commerce-Business | Multimedia communications | Web studies | Electronic Commerce | Pooling and Separating Equilibrium | Signaling Theory
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Abstract
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While online commerce offers certain benefits for buyers, buyers face challenges evaluating the quality of online sellers because of the virtual representation of goods and services. The uncertainty associated with the quality of sellers and products is influenced by information asymmetry between sellers and buyers and is generally resolved by signaling. Online signaling is the focus of three studies in my dissertation. In particular, I examine how sellers of high and low quality use website signals to influence buyer behavior and how buyers evaluate website signals to avoid the problem of adverse selection (e.g. choosing a wrong seller). Using signaling, trust and deception theories, I consider website signals both from the seller and buyer perspectives.;This research seeks to answer the following questions: What is the difference in quantity and types of signals that high- and low-quality online sellers use pre-contractually? What signals affect buyer perceptions of seller and product quality as well as deception, trust and eventually willingness to buy? In addition, this research investigates the existence of a separating equilibrium in online marketplaces.;To investigate these questions, three complementary studies were conducted. The first study investigates the seller perspective and draws from signaling theory to develop a tri-dimensional framework to classify signal usage by sellers of varying quality. The framework is tested with a content analysis of existing websites. The results of this study confirm that there is a difference in signal usage between low-and high-quality online sellers and show that low-quality sellers are likely to avoid costly, easy-to-verify signals and tend to use fewer signals than high-quality sellers do.;The second and the third studies focus on the buyer perspective with an evaluation of behavioral attitudes and perceptions of buyers towards website signals, sellers and products. The results of the second study demonstrate that buyers pay attention to product presentation and find trust inducing signals important in evaluating the quality of sellers and products. The findings of the third study suggest that signal perceptions are formed according to tenets of signaling theory and are influenced by the cost of signals. More costly signals are found more significant in affecting buyer perceptions of deception and trust. In addition, the results suggest that a separating equilibrium exists in online marketplaces as buyers can differentiate among websites of high and low quality by perceiving high quality websites as more trustworthy and less deceptive, and low quality websites as less trustworthy and more deceptive.
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Type
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dissertation
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Source
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2009_2013.csv
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degree
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Ph.D.
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Program
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Business
