Abstract
Four experimental studies examine the differential effects of three signals—retailer reputation, perceived advertising expenses, and warranties—on consumer risk perceptions, across two (online and in-store) shopping conditions. The results of three studies suggest that for products with high non-digital attributes (e.g., shirts and jeans), consumers perceive higher risks in online than in in-store settings. Also, for these types of products, mainly due to the non-availability of other significant cues, consumers tend to rely more on signals as diagnostic cues in online shopping conditions. Effectively, the results of these three studies imply that signals are stronger risk reducers in online than in in-store shopping conditions for products high in non-digital attributes. The fourth study tests the boundary condition whereby the diagnostic effects of signals are diminished for products with high digital attributes (e.g., music CDs).
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