Abstract

PurposeTo understand how users of online marketplaces process market signals in their decision making and whether this depends on if the good is of high or low involvement. Design/methodology/approachThe paper employs a mixed methods approach. Study 1 draws on an analysis of interviews with online marketplace users using hypothetical eBay purchases as stimuli, understanding how users conceptualize specific market signals and whether their importance varies depending on the type of purchase (high versus low involvement good). Study 2 tests hypotheses derived from signaling theory, using an eye tracking experiment. FindingsPrice and photographs act as “fast and frugal” signals for inclusion in consideration sets for low involvement purchases, but consumers deem them insufficient for high involvement purchases where high-cost signals that help establish seller credibility are far more salient. Users pay relatively greater attention to costly market signals, which are beyond sellers’ direct control, for high involvement goods. Practical implicationsThe paper offers insights for sellers regarding the presentation of quality cues and strategies online marketplaces can employ to reduce information asymmetry. Originality/valueDrawing on and extending signaling theory, the paper introduces and confirms hypotheses for understanding users’ attention to market signals when making purchase decisions on online marketplaces. It identifies how the degree of involvement of a product affects the processing of market signals.

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