Dressing Your Online Auction Business for Success: An Experiment Comparing Two E-Bay Businesses

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signaling theory, website quality, reputation, price premiums, online auctions, empirical research, e-image

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Businesses can choose who they want to be online. Product and company attributes that are directly perceivable in the real world can be manipulated to make a favorable impression on online buyers. This study examines whether creating a more professional online e-image can signal consumers about unobservable product or company quality, and whether this signal influences their willingness to transact with the company, and ultimately the prices they are willing to pay for the company’s goods and services. An empirical study is presented that examines two online auction businesses utilizing different company names and auction listing styles to sell items in parallel over the course of one year. The findings suggest that increasing the quality of an auction business’s e-image does increase consumers’ willingness to transact with the business, and increases prices received at auction. The study also demonstrates the ability to use eBay as an experimental laboratory for testing a variety of hypotheses about purchasing behavior online.

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Citation / Publisher Attribution

MIS Quarterly, v. 32, no. 3, p. 653-670