Purschasing Complex Services on the Internet; an Analysis of Mortgage Loan Acquisitions

31 Pages Posted: 3 Nov 2008

See all articles by Bjorn Vroomen

Bjorn Vroomen

Erasmus Research Institute of Management (ERIM)

Bas Donkers

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE); Erasmus Research Institute of Management (ERIM); Tinbergen Institute

Peter C. Verhoef

University of Groningen - Department of Marketing & Marketing Research

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics

Date Written: 27 2003, 10

Abstract

In contrast to, for example, books and compact discs, the number of complex services offered on the Internet is still small. A good example of such a service concerns mortgage loans. The decision-making process differs for complex services in that they have an extra intermediate step of `indication of interest'. The web site is (1) visited and searched for information, subsequently (2) a request for the service is made, which may lead to (3) a purchase. This difference in the buying process and the complexity of the decision-making process, requires afurther investigation on purchasing complex services on the Internet. We therefore focus on online purchases of complex services, paying special attention to the determinants of a purchase of such services. To this end, we acquired a unique data set from an online Dutch financial service provider, which offers services like mortgage loans and insurances on the Internet. This data contains, besides clickstream data, also data on user-specific information like demographics. We also obtained information on whether the request for the service re-sulted in a purchase. Search behavior, product familiarity and trust appear to be useful determinants of purchase of complex services. Direct managerial applications of our model include the ability to identify customer characteristics of successful applicants, and subsequently the selection of customers.

Keywords: online purchasing behavior, search behavior, trust, decision support system, internet

JEL Classification: M, M31, C44

Suggested Citation

Vroomen, Bjorn and Donkers, Bas and Verhoef, Peter C. and Franses, Philip Hans, Purschasing Complex Services on the Internet; an Analysis of Mortgage Loan Acquisitions (27 2003, 10). ERIM Report Series Reference No. ERS-2003-075-MKT. Available at SSRN: https://ssrn.com/abstract=1290953

Bjorn Vroomen

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands

Bas Donkers

Erasmus University Rotterdam (EUR) - Erasmus School of Economics (ESE) ( email )

P.O. Box 1738
Rotterdam, NL 3000 DR
Netherlands
+31 10 408 2411 (Phone)
+31 10 408 9169 (Fax)

HOME PAGE: http://people.few.eur.nl/donkers/

Erasmus Research Institute of Management (ERIM) ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 2411 (Phone)
+31 10 408 9169 (Fax)

HOME PAGE: http://people.few.eur.nl/donkers/

Tinbergen Institute ( email )

Burg. Oudlaan 50
Rotterdam, 3062 PA
Netherlands

Peter C. Verhoef

University of Groningen - Department of Marketing & Marketing Research ( email )

Netherlands

Philip Hans Franses

Erasmus University Rotterdam (EUR) - Department of Econometrics ( email )

P.O. Box 1738
3000 DR Rotterdam
Netherlands
+31 10 408 1278 (Phone)
+31 10 408 9162 (Fax)

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