How signaling mechanisms reduce "lemons" from online group buying (OGB) markets? A study of China

Hossain, M, Rahman, S, Chowdhury, T, Chan, C, Yang, X and Su, Q 2018, 'How signaling mechanisms reduce "lemons" from online group buying (OGB) markets? A study of China', International Journal of Physical Distribution & Logistics Management, vol. 48, no. 7, pp. 658-681.


Document type: Journal Article
Collection: Journal Articles

Title How signaling mechanisms reduce "lemons" from online group buying (OGB) markets? A study of China
Author(s) Hossain, M
Rahman, S
Chowdhury, T
Chan, C
Yang, X
Su, Q
Year 2018
Journal name International Journal of Physical Distribution & Logistics Management
Volume number 48
Issue number 7
Start page 658
End page 681
Total pages 24
Publisher Emerald Publishing Limited
Abstract Purpose A major transformation in retail logistics over the few years is backed by enormous improvements in internet technologies. It is now easy for e-retailers to entertain delivery progression, or consumers can share use-experience with future customers and thereby reducing information asymmetry. The purpose of this paper is to investigate the effect of different signals on consumer behavior in the presence of information asymmetry, in the context of online group buying (OGB) markets in China. Design/methodology/approach Based on the lemon market theory (LMT) and signaling theory, the study develops a research model of the OGB consumers' context in China, which is validated using data from an online survey. A total of 528 responses are used for data analysis applying structural equation modeling technique. Findings The findings of the study show that perceived vendor quality (PVQ) and perceived product quality (PPQ) have significantly positive effects on intention to purchase from OGB websites. PVQ is associated with perceived reputation and perceived trustworthiness (PT) of vendor, and the determinants of PPQ are quality assurance information of products, and information about mer-chants. Further, PT has a mediating effect, while asymmetry of information has a moderating effect. Research limitations/implications The research model is valid as a generic OGB model that can be investigated in other contexts to understand the generalizability of the findings. Future research is needed to incorporate additional relevant factors (e.g. price, advertising activity/investments) that may help increase the acceptability of the model to a wide range of e-commerce contexts. Two of the control variables (gender and prior internet experience) were found to be significant; this could be further examined in future studies to determine the relative impact on each causal relationship. Originality/value Whereas prior studies in the domain of consumer service proposed different sign
Subject Information Systems Management
Logistics and Supply Chain Management
Keyword(s) China
Information asymmetry
Consumer behaviour
Signaling theory
Lemon market theory
Online group buying
DOI - identifier 10.1108/IJPDLM-02-2017-0113
Copyright notice © Emerald Publishing Limited
ISSN 0960-0035
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