Product Fit Uncertainty in Online Markets: Nature, Effects and Antecedents

Information Systems Research (2014), 25 (2), 328-344

Fox School of Business Research Paper No. 14-012

32 Pages Posted: 27 Dec 2013 Last revised: 31 Dec 2016

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: February 27, 2014

Abstract

Product fit uncertainty (defined as the degree to which a consumer cannot assess whether a product’s attributes match her preference) is proposed to be a major impediment to online markets with costly product returns and lack of consumer satisfaction. We conceptualize the nature of product fit uncertainty as an information problem and theorize its distinct effect on product returns and consumer satisfaction (versus product quality uncertainty), particularly for experience (versus search) goods without product familiarity. To reduce product fit uncertainty, we propose two Internet-enabled systems – website media (visualization systems) and online product forums (collaborative shopping systems) – that are hypothesized to attenuate the negative effect of product type (experience versus search goods) on product fit uncertainty.

Hypotheses that link experience goods to product returns through the mediating role of product fit uncertainty are tested with analyses of a unique dataset composed of secondary data matched with primary direct data from numerous consumers who had recently participated in buy-it-now auctions. The results show the distinction between product fit uncertainty and quality uncertainty as two distinct dimensions of product uncertainty, and interestingly show that, relative to product quality uncertainty, product fit uncertainty has a significantly stronger effect on product returns. Notably, while product quality uncertainty is mainly driven by the experience attributes of a product, product fit uncertainty is mainly driven by both experience attributes and lack of product familiarity. The results also suggest that Internet-enabled systems are differentially used to reduce product (fit and quality) uncertainty. Notably, the use of online product forums is shown to moderate the effect of experience goods on product fit uncertainty, while website media are shown to attenuate the effect of experience goods on product quality uncertainty. The results are robust to econometric specifications and estimation methods. The paper concludes by stressing the importance of reducing the increasingly-prevalent information problem of product fit uncertainty in online markets with the aid of Internet-enabled systems.

Keywords: Product Fit Uncertainty, Product Quality Uncertainty, Product Returns, Internet-enabled Systems Expectation Confirmation Theory, Online Markets

Suggested Citation

Hong, Yili and Pavlou, Paul A., Product Fit Uncertainty in Online Markets: Nature, Effects and Antecedents (February 27, 2014). Information Systems Research (2014), 25 (2), 328-344; Fox School of Business Research Paper No. 14-012. Available at SSRN: https://ssrn.com/abstract=2371747 or http://dx.doi.org/10.2139/ssrn.2371747

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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