Product Uncertainty in Online Marketplaces in China: An Econometric Model

America's Conference on Information Systems, Lima, Peru, 2010

11 Pages Posted: 8 May 2010

See all articles by Yili Hong

Yili Hong

Arizona State University (ASU) - W.P. Carey School of Business

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Date Written: April 26, 2010

Abstract

Most studies on online marketplaces focus on seller uncertainty and rely on data from online marketplaces in the U.S. This paper extends this literature by focusing on product uncertainty and defining its two dimensions - description uncertainty (identifying the product‘s characteristics) and fit uncertainty (matching product characteristics with the buyer’s needs). It also examines the distinction, relationship, and relative effects of the two dimensions of product uncertainty on actual product returns, and how online marketplaces can use IT-enabled mechanisms to mitigate product uncertainty.

The proposed hypotheses are tested with data from 144 buyers in Taobao’s online marketplace in China using an econometric model. The results stress the role of product presentations in reducing description uncertainty and of online communication, both between the buyer and the seller and also among buyers, in reducing fit uncertainty. The paper draws implications for reducing product uncertainty in online marketplaces with the aid of IT.

Keywords: Online marketplaces, product uncertainty, fit uncertainty, description uncertainty, buyer-seller communication, product presentation, product returns

Suggested Citation

Hong, Yili and Pavlou, Paul A., Product Uncertainty in Online Marketplaces in China: An Econometric Model (April 26, 2010). America's Conference on Information Systems, Lima, Peru, 2010. Available at SSRN: https://ssrn.com/abstract=1600524

Yili Hong (Contact Author)

Arizona State University (ASU) - W.P. Carey School of Business ( email )

Tempe, AZ 85287-3706
United States

HOME PAGE: http://yilihong.github.io/

Paul A. Pavlou

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

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