Abstract

Many Internet vendors have realized the importance of “locking-in” online customers in order to ensure their profitability. For this reason, many researchers have paid attention to the formation of switching costs which acting as a barrier that prevent customers from easily changing from one vendor to another. Erection of switching barriers will represent an important strategy for locking in customers and increasing their willingness to pay price premium. This study aims to examine the relationships among customer satisfaction, perceived value, relative advantage, and switching costs. This study further examines the effect of switching costs on customer’s willingness to pay more. This study collects data and test the research model over two contexts, search product context and experience product context. The empirical results show the key role of switching costs in leading to willingness to pay more and the relationships among the four constructs. The theoretical and practical implications of this study are then discussed.

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