Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference

47 Pages Posted: 18 Jan 2017 Last revised: 16 Sep 2018

See all articles by Yunhui Huang

Yunhui Huang

Nanjing University - School of Business

Kai Lim

City University of Hong Kong (CityUHK) - Faculty of Business

Zhijie Lin

Tsinghua University

Shunping Han

Nanjing University - School of Business

Date Written: September 7, 2018

Abstract

Previous research has shown that because offline store space is costly, customers tend to associate large interstitial space among products in a bricks-and-mortar store with high price. Drawing on consumer inference and signaling theories, the present research suggests this offline association could be overgeneralized to online contexts and lead customers to illogically infer high price based on large interstitial space among products in an online product catalog (i.e., online product catalog space, OPCS). We conducted five experiments to test whether and why OPCS affects customers’ online store price perception and its downstream effect on store evaluation. Our findings indicate that (1) an online store with larger OPCS is perceived to be selling more expensive products (Study 1); (2) the effect of OPCS is due to offline-online overgeneralization rather than online learning, because either a reminder of offline-online differences (Study 2) or sufficient web design knowledge (Study 3) diminishes the effect of OPCS on store price perception, and only people who believe that large offline space is linked with high price show this effect (Study 4); and (3) customers who care more about quality evaluate a store with larger OPCS more positively, whereas customers who care more about price do the opposite (Study 5). These findings contribute to literatures on web design, price perception, consumer inference in e-commerce, and offline-online behavior transfer. We also discuss implications for practice and offer suggestions for future works.

Keywords: online product catalog space; store price perception; environmental cues; consumer inference; signaling; web personalization

Suggested Citation

Huang, Yunhui and Lim, Kai and Lin, Zhijie and Han, Shunping, Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference (September 7, 2018). Available at SSRN: https://ssrn.com/abstract=2900105 or http://dx.doi.org/10.2139/ssrn.2900105

Yunhui Huang

Nanjing University - School of Business ( email )

22 Hankou Road
Nanjing, Jiangsu 210093 210093
China

Kai Lim

City University of Hong Kong (CityUHK) - Faculty of Business ( email )

Kowloon
Hong Kong

Zhijie Lin (Contact Author)

Tsinghua University ( email )

Haidian District
Beijing, Beijing 100084
China

Shunping Han

Nanjing University - School of Business ( email )

22 Hankou Road
Nanjing, Jiangsu 210093 210093
China

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