Abstract

An electronic commerce marketing channel is fully mediated by information technology, creating information asymmetry (i.e., limited information). Such asymmetry may impede consumers’ ability to effectively assess certain types of products, thus creating challenges for online sellers. Signaling theory can aid in the understanding of how extrinsic cues—signals—can be used by sellers to convey product quality information to consumers, reducing uncertainty and facilitating a purchase or exchange. This study proposes a model to investigate website quality as a potential signal of product quality and consider the moderating effects of product information asymmetries and signal credibility. The study also finds that perceived value and cognitive lock-in can predict consumer purchase intentions. Furthermore, personalized product recommendation (PPR) services offered by online retailers are found to influence consumer store loyalty. The results indicate that website quality influences consumers’ perceptions of product quality, and affects online purchase intentions. Website quality is found to have a greater influence on perceived product quality when consumers have higher information asymmetry. Signal credibility is found to strengthen the relationship between website quality and product quality perceptions for a high quality website. The implications of cognitive lock-in and product cues for increasing purchase intentions are discussed. Retailer learning reflected in higher quality PPRs is associated with both lower product screening cost and higher product evaluation cost. We also discuss which PPRs influence consumer repurchase intentions in electronic markets.

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