Information Search Costs Research Articles

‘They adopt, I also adopt’: The neighborhood effects and irrigator farmers’ conversion to adopt water-saving irrigation technology

Promoting water-saving irrigation technology (WSIT) has long been recognized as an effective measure to reduce irrigation water use and alleviate regional water poverty. Neighbours are the groups with the most interaction, the most intensive contact and the most frequent communication in agricultural production. In this paper, based on a field survey of irrigator farmers of China, experiments were conducted to evaluate the contribution of neighbour effect to farmers’ WSIT behaviour and its moderating mechanism between neighbour effect and technology adoption. The results show 26.7 % farmers adopt water-saving technology and these farmers often have strong neighborly relationships. In particular, neighbor effect significantly promote WSIT adoption by 42.1 % and farmers with strong neighborly effects apply significant higher technology compared to farmers with weak neighbourly effects. Furthermore, mechanism results indicated that neighbour effects indirectly influence farmers' adoption of water-saving irrigation technology through three pathways: reducing information search costs, mitigating agricultural production risks and benefiting from the demonstration effect. Moreover, the heterogeneous results report that higher-income, lower digital and lower training frequency farmers will benefit more from the NE in terms of WSIT. Overall, this research provides a micro foundation and policy implications for the promotion of WSIT, and sheds light upon how the government can formulate relevant policies to promote the sustainable development of agricultural water resources.

Does distance from government hinder enterprises’ OFDI？Evidence from China

This study analyzes the impact of government–enterprise distance on the probability of outward foreign direct investment (OFDI) with matched data from Chinese prefecture-level municipal governments, the Chinese industrial enterprises database, and the directory of overseas investment enterprises. We determine that increased distance between the government and enterprises has a significant negative impact on the probability of enterprises’ OFDI. Mechanism analysis demonstrates that increased government–enterprise distance, which causes higher information search and relationship building costs, and decreased accessibility of public service, are the main reasons for this decline.

Deep Learning-Powered Financial Product Recommendation System in Banks

With the rapid evolution of financial technology, the recommendation system for financial products, as a crucial technology to enhance user experience and reduce information search costs, is increasingly becoming the focus of the financial services sector. As market competition intensifies, the diversity of user demands, coupled with the continuous expansion of financial product types, has exposed limitations in traditional recommendation systems regarding accuracy and personalized services. Therefore, this study aims to explore the application of deep learning technology in the field of financial product recommendations, aiming to construct a more intelligent and precise financial product recommendation system. The metrics we focus on include precision, recall, and F1-score, comprehensively evaluating the effectiveness of the proposed methods. In terms of methodology, we first employ a Transformer model, leveraging its powerful self-attention mechanism to capture the complex relationships between user behavior sequences and financial product information.

Impact of Digital Government on Digital Transformation of Enterprises from the Perspective of Urban Economic Sustainable Development

Enterprise digital transformation stands as a pivotal driving force for urban economic sustainable development. Investigating the role of digital government policies in fostering urban economic growth through enterprise digital transformation is essential for guiding governments in a more targeted pursuit of urban development policies. Utilizing the establishment of the urban big data administration bureau as a quasi-natural event and leveraging data on A-share listed companies from 2012 to 2022, this study scrutinizes whether the construction of digital government effectively stimulates enterprise digital transformation and, consequently, promotes urban economic development. Benchmark regression results unequivocally demonstrate that digital government policies significantly propel enterprise digital transformation. Mechanism analysis elucidates that digital government facilitates enterprise digital transformation by enhancing the urban business environment and mitigating the influence of information search costs. Heterogeneity analysis underscores the influence of factors such as the city’s area location, administrative level, and economic development level on policy effects. Notably, the impact of digital government policies is more pronounced in central and western cities, provincial capitals, and cities with lower economic development. Economic consequence analysis reveals that digital government policies play a crucial role in fostering urban economic sustainable development by fostering the digital transformation of enterprises.

Commercial bank digital transformation, information costs, and corporate financial constraints

ABSTRACT The rapid development of digital finance has transformed traditional financial institutions. We investigate the effect and economic consequences of bank digital transformation on corporate financial constraints using data from China. The results show that bank digital transformation alleviates corporate financial constraints by decreasing information search, processing, and verification costs. Furthermore, the effect of bank digital transformation on corporate financial constraints is more pronounced for firms with higher contract intensity, more intangible assets, and poorer external information environment. We also find that bank digital transformation alleviates corporate financial constraints by increasing debt financing. In addition, we show that digital transformation promotes lending by big banks, resulting in the crowding-out effect. Finally, we find that bank digital transformation promotes the flow of credit resources to non-zombie firms, which effectively improves credit allocation efficiency. This paper extends research on digital finance and new structural finance from the perspective of bank digital transformation.

Advantaging Tourism Through Influencers: Applying Transaction Cost Theory to Recognize Top Hero, Hub, and Hygiene Content Tactics for Tourism Marketing

This study is the first to apply transaction cost theory to identify optimal influencer marketing strategies for the tourism sector through three content types: hero, hub, and hygiene content. Transaction cost theory posits that stakeholders seek to minimize information search and delivery costs. Semi-structured interviews were conducted with different experienced level tourists to measure the effect of influencer attributes and content on inspiration levels. The findings indicate that differentiating content based on targeted personas minimizes transaction costs. Hero content highly motivated specific tourist personas to visit destinations. Hub content provided practical trip planning details. Hygiene content addressed fundamental customer concerns. By framing influencer marketing through the lens of transaction cost economics, this study contributes to the literature by tailoring influencer content (hero, hub, and hygiene content) to meet the specific needs of tourist personas, which managerially can optimize credibility and value while reducing tourism stakeholders’ information search and delivery costs.

Operation strategies of capital-constrained small and medium-sized enterprises based on blockchain technology

Introduction: In reality, due to the low credit rating of small and medium-sized enterprises (SMEs), it is difficult for them to obtain sufficient financing from a single financier. This paper considers a dual-channel supply chain consisting of a capital-constrained manufacturer, an e-commerce platform (ECP), a third-party logistics company (3PL) and consumers. There are two innovations in this paper: the manufacturer obtains sufficient production funds through hybrid financing of the ECP and 3PL, and consumers want to know product information and compare prices. The contributions of this paper are to investigate new applications of blockchain in both hybrid financing and meeting consumer information search needs.Methodology: We discuss the operation and pricing decisions of supply chain in two scenarios. These two scenarios are without adopting blockchain (N) and with adopting blockchain (B). Then, we compare the equilibrium decisions in two scenarios.Results: The results show that the supply chain will adopt blockchain when certain conditions are met. The initial adoption of blockchain is bad for the ECP and 3PL. Further, we find that with the increase of financing ratio, the optimal financing interest rate of the ECP decreases, while the optimal financing interest rate of the 3PL increases.Discussion: The numerical analysis shows that the adoption of blockchain can be more profitable when the cost of information search is high.Management insights: In order to achieve supply chain coordination, the manufacturer should give subsidies the ECP and 3PL.

Consumer Price Search Behaviors in Online Shopping

Aims: Simultaneously, the decelerating economy in the real world due to the covid-19 has intensified the competition in the virtual world, forcing online retailers to consider how to steering effective price promotion strategies to attract customers and to increase their purchase intentions. Online retailers are either struggling to find ways to formulate their online price promotion strategies or simply adopt the offline price promotion strategies. However, the Internet provides online shoppers with the benefit of searching and evaluate price information efficiently and effectively, greatly reduces consumers’ information search costs. Under this circumstance, the effect of offline price promotion strategies on consumers’ price perceptions and purchase decision may become a hinderance instead of an assistance. Overall, the price information provided by the Internet influences consumer perceptions and reactions to online shopping. The purpose of this research is to provide insight into consumers’ online price search behavior and consumers’ reactions to online price promotion.
 Methodology: An in-depth discussion of the literature review on online consumer price search behavior was applied. Specifically, the literature review covers the issues of price comparison search engine, price comparison refund policy, price promotion, and semantic cues related to consumer price perception and purchase intention.
 Conclusion: These research propositions can help online retailers to gain a deeper understanding of consumer price search behavior, response to price information, and promotions. Consequently, online retailers are able to better formulate price communication strategies effectively. This price scheme can influence consumer price search behavior and then purchase intention.

Information search costs and trade credit: evidence from high-speed rail connections

We investigate the impact of information search costs on firms’ access to trade credit used as a major source of interfirm financing. Using the openings of high-speed rails (HSR) in China as exogenous shocks, we find that firms located in cities with HSR connections receive more trade credit from their suppliers. Further analyses show that the HSR effect on trade credit concentrates among customers with poor information transparency and that HSR openings improve the customers’ information environment, suggesting that a decline in information search costs promotes supplier financing. Our finding reveals a positive externality of HSR construction on interfirm financing.

Government‐led e‐commerce expansion project and rural household income: Evidence and mechanisms

AbstractThis paper examines the impacts of a government‐led e‐commerce expansion project on household income. We find that the project has led to increases in rural household income. The positive impacts are more prominent for lower‐income rural households. The income‐increasing effects are driven by the reduction in information search costs and transportation costs. The provision of complementary interventions for e‐commerce, such as promoting the internet‐related skills of farmers and the expansion of formal financial credit support is also important for the program's success. The results provide policy implications for the design and implementation of government‐led e‐commerce policies in developing economies.

Information Infrastructures for Black-Interest Advocacy in Congress

Information is one of the most prized commodities in the legislative decision-making process. However, gaining access to high quality information through traditional institutional means in decreasing, and institutional and interpersonal marginalization puts Black lawmakers at a distinct disadvantage. This article explains how Black lawmakers rely on extra-party institutions to fulfill the desire for information when the institution falls short. In fulfilling this responsibility as the key source of information on conditions that plague the Black community, the organization has developed an information infrastructure—a combination of internal and external mechanisms designed to improve their research and informational capacity. To highlight the utility of the information infrastructure, we examine Special Order Hour Speeches delivered from the 113th through the 115th Congress (2013–2018). We find, the CBC information infrastructure provides its members access to highly specialized information without having to sacrifice the quality of sources to account for information search costs.

Will Transaction Cost Be Reduced in the E-Commerce Model of Farmland Transfer in China?

Farmland transfer is an inevitable approach to solving farmland fragmentation and the resulting low productivity in China. Although the central government has formulated various guidelines on farmland transfer, the traditional transfer model faces high transaction cost and thus hinders transfer. With e-commerce development in China, an alternative Jutudi model of farmland transfer with e-commerce has occurred in China. Although transaction cost is an important perspective for understanding reforms, few studies have been conducted to explore whether the transaction cost of the Jutudi model would be reduced compared with the traditional model of farmland transfer and why the Jutudi model succeeds. This study introduces the operation mechanism of the Jutudi model of farmland transfer and the context of the pilot project in Jixi County, Anhui Province. Changes in transaction cost in terms of information search cost, negotiation and contracting process costs, and contract supervision and execution costs are analyzed in the Jutudi model. It is found that the productivity of transferred farmlands significantly improved using the Jutudi model in Jixi County. Transaction cost is generally lowered in the Jutudi model compared with the traditional one. How the changes in transaction cost contribute to farmland transfer is also explained. Potential problems and relevant recommendations have also been discussed to promote the Jutudi model.

ON SOME FUNDAMENTAL CONSEQUENCES OF DIGITALIZATION IMPACT ON THE ECONOMY

Abstract. During the last decades, the world has entered the era of an information economy, in which knowledge, information, and services are more valuable than manufacturing. The key role in the development of such an economy is the large-scale implementation of digital technologies, which sharply reduce the costs of data storage, processing, and transmission. So, the analysis of these changes’ eff ects on the economic processes and economic agents’ decision-making is an important current task. J. Stiglitz was the fi rst to proclaim the transition to the information paradigm in economics. Current research in this sphere is focused on the analysis of digital markets effi ciency, pricing on digital marketplaces, peculiarities of consumer behavior in a digital world, prospects of successful price discrimination and targeted advertising on digital markets, the importance of feedback and reputation for digital marketplaces design. The purpose of the article is to examine the effects of digital technologies’ mass implementation on the different types of economic costs and economic behavior of individuals and firms. The widespread implementation of digital technologies caused a radical decline in diff erent kinds of costs in the economy, namely search costs, replication costs, transportation costs, tracking costs, and verifi cation costs. The important consequences of search cost reduction are the increased variety of products and lower prices for many goods and services, while price dispersion has persisted. One more fundamental result is the rapid development of digital marketplaces designed to help buyers and seller to fi nd each other. The task of improvement matching between buyers and sellers can be solved in two opposite ways: either by developing some kind of centralized assignment mechanism or by providing eff ective search procedures. To be successful, digital marketplaces should maintain an appropriate level of trust on market and make a tradeoff between two important objectives: effi cient use of all information available and keeping transaction costs low. As any digital activity is fi xed and automatically stored, the easiness of tracking all individuals’ online actions off ers promising perspectives for consumer behavior study and effi cient infl uence on it. The scales of information collected about consumer preferences and habits even today make possible successful price discrimination and highly targeted advertising. That also means an increased threat to consumer privacy because of potential personal data leaks. On the other hand, the reduction of tracking costs means that the identity of any person can be rather easily determined. This decline in the verifi cation costs can help to create new instruments of digital reputation. On e of the key prerequisites for digital marketplace success is the application and permanent improvement of effi cient feedback mechanisms using reputation scores. Summarizing, the large-scale implementation of digital technologies caused a sharp reduction in many important types of economic costs. The decline in search costs resulted in the rapid development of numerous digital marketplaces aimed to improve matching between sellers and buyers in diverse spheres of the economy. The reduction in tracking and verifi cation costs provided prominent opportunities both for consumer behavior advanced research and targeted infl uence on it, and for innovative mechanisms of market participants’ reputation formation. Keywords: information economy, digital technologies, information search costs, digital marketplace, information goods, tracking costs, price discrimination, verifi cation costs.

Internal or External Word-of-Mouth (WOM), Why Do Patients Choose Doctors on Online Medical Services (OMSs) Single Platform in China?

(1) Background: Word-of-mouth (WOM) can influence patients’ choice of doctors in online medical services (OMSs). Previous studies have explored the relationship between internal WOM in online healthcare communities (OHCs) and patients’ choice of doctors. There is a lack of research on external WOM and position ranking in OMSs. (2) Methods: We develop an empirical model based on the data of 4435 doctors from a leading online healthcare community in China. We discuss the influence of internal and external WOM on patients’ choice of doctors in OMSs, exploring the interaction between internal and external WOM and the moderation of doctor position ranking. (3) Results: Both internal and external WOM had a positive impact on patients’ choice of doctors; there was a significant positive interaction between internal and third-party generated WOM, but the interaction between internal and relative-generated WOM, and the interaction between internal and doctor-generated WOM were both nonsignificant. The position ranking of doctors significantly enhanced the impact of internal WOM, whereas it weakened the impact of doctor recommendations on patients’ choice of doctors. (4) The results emphasize the importance of the research on external WOM in OMSs, and suggest that the moderation of internal WOM may be related to the credibility and accessibility of external WOM, and the impact of doctor position ranking can be explained by information search costs.

Fitness switching costs scale (FSCS): development and assessment of higher-order reflective-formative scale

ABSTRACT Research question Scholars have recognized the critical role of switching costs in predicting consumption behavior. However, a scale measuring fitness consumers’ switching costs was unavailable. The purpose of the study is to develop and validate a fitness switching costs scale (FSCS). Research methods A three-step study was conducted. Step 1 generated a pool of items, which were then content validated by expert judges (N = 6). Step 2 (n = 455) examined the reliability and validity of the FSCS. Finally, Step 3 (n = 441) cross-validated the FSCS. Results and Findings The results provided support for the reliability and validity of the FSCS composed of the third-order formative construct (i.e. switching costs) with the four second-order formative constructs (i.e. procedural costs, relationship costs, financial costs, and convenience costs) and the 11 first-order reflective constructs (i.e. adjustment to a new fitness center, lack of other attractive fitness centers, information search costs, fitness center relationship loss, employee relationship loss, other consumer relationship loss, termination fee, loss of price benefit, loss of location benefit, loss of service-hour benefit, and loss of equipment availability benefit). Implications The FSCS allows researchers to obtain reliable results and advances theory development in fitness switching costs. Fitness practitioners can also use the FSCS and survey their current consumers to determine factors that prevent consumer defection.

How Much Did Internet Use Promote Grain Production?-Evidence from a Survey of 1242 Farmers in 13 Provinces in China.

Increasing grain production and ensuring food security are always major issues in China, which are related to the sustainable development of the nation. The sudden outbreak of COVID-19 in 2020 has brought new challenges to global food security, which highlights the “ballast stone” and “stabilizer” role of food. China’s food security must rely on domestic production. As an important production factor, the Internet is also an important channel for farmers to obtain agricultural information, which can effectively reduce the information search cost and information asymmetry. Existing studies have mainly focused on the impact of Internet use on agricultural inputs, agricultural prices, and agricultural efficiency; there are few studies on the impact of Internet use on grain production. To fill this gap, based on the micro survey data of 1242 maize farmers in 13 provinces in China, this paper employs linear regression models and PSM methods to deeply explore the impact of Internet use on farmers’ grain production. The results show that Internet use has a significant positive impact on the grain production of farmers. Compared with the farmers who do not use the Internet, Internet use increases the maize yield of farmers by 14.25%. The heterogeneity analysis further shows that the impact of Internet use on the grain production of different farmers varies significantly: the maize yield per ha after using the Internet for farmers of younger, low education level, large-scale, and living in well-developed villages had increased by 13.65%, 15.38%, 23.94%, and 10.64%, respectively, compared with the counterfactual scenario of farmers who do not use the Internet. The results of this paper have passed the robustness test.

Consumer's behavior determinants after the electricity market liberalization: the Portuguese case

<abstract> <p>Electricity markets have been liberalized worldwide, but the success of country specific experiences varied widely. Consumers' behavior is among the key factors for successful liberalization experiences namely regarding the decision to switch operator. This decision has been shown to be influenced by a multiplicity of factors. The goal of this article is to explore the analysis of the drivers for switching operator in a liberalized electricity market. With that purpose, we focused on the residential Portuguese case using a questionnaire. The logit estimation showed that men are more likely to switch supplier than women and that larger families are less likely to do so probably, due to the perception of high information search costs. Other sociodemographic variables were not found to be statistically significant. Regarding specific determinants, our results showed that past experiences with a supplier, dissatisfaction with the current operator, and family and friends' experiences were the most important determining factor for the decision to switch operator. Hence, the price was not the most important determinant. We also explored if different income groups had differentiated responses regarding the main drivers but concluded that there was no evidence that the income group affected the importance given to the price or to the other determinants for the decision.</p> </abstract>

Biases in low‐information environments: Understanding for‐profit and non‐profit salary differentials in Haiti

AbstractThe Global South contains low‐information environments that impose information search costs on organisations. We compare explanations for how employers make decisions in these environments. To do so, we analyse salaries collected from employers in Haiti, including local and international non‐profits and domestic and foreign businesses. Although preliminary findings suggest that international non‐governmental organisations pay above‐market salaries, accounting for alternative explanations from behavioural economics causes the organisational form's importance to dissipate. We find that anchoring and framing mechanisms separately influence decision‐making. These findings direct us to focus more on the actions and tools managers use to make decisions in low‐information environments.

Does ICT create a new driving force for manufacturing?—Evidence from Chinese manufacturing firms

The Internet has changed the global economic landscape. In particular, the fast-changing Information and Communication Technology (ICT) has directly led to a far-reaching impact on the production and operation of firms. Many previous studies have discussed the relationship of ICT and the total factor productivity (TFP) of firms, but failed to reach a consistent conclusion. This paper, based on the data of Chinese listed manufacturing firms from 2010 to 2019, explores the impact of ICT on manufacturing firms' TFP and its mechanism, and concludes that ICT have positive correlation with the TFP of manufacturing firms. According to the estimated results of this paper, TFP will increase by about 1.8 % for every 1 % of additional ICT investment. Through channel analysis, this paper finds that the positive effect can be achieved through the following four channels: cutting information search costs, enhancing information processing capabilities, reducing internal capital misallocation, and promoting R&D efficiency. This paper is a supplement to research on firm TFP, provides new micro-evidence for exploring the relationship between ICT and TFP of manufacturing firms, and brings important implications for understanding the role of ICT in firm production activities.

Environmental Attitudes and Willingness to Purchase Online—Classification Approach

During the last several years, a tremendous increase in the popularity of online shopping has been observed. There are several possible reasons behind it, some of them, like competitive pricing, convenience or low cost of information search, considered to be extrinsic, others—like ease of use of this channel, pleasure related to it or willingness to reduce social interactions—intrinsic. The purpose of this research is to evaluate another factor, i.e., consumers’ environmental attitudes, in the perspective of their possible relation with the perception and willingness to use online and conventional shopping channels. In order to achieve this, a self-reporting questionnaire was developed and the data from a representative sample of 1000 Polish Internet users was gathered. The research procedure included cluster analysis, whose objective was to identify groups of customers with similar composition of environmental attitudes and next, a set of Kruskal–Wallis tests, aimed at identifying differences in opinions on channels between these clusters. The research proved that large groups of consumers with consistent sets of environmental attitudes exist and the scope of differences between such clusters is not reduced to a unidimensional, “positive–negative” continuum. Furthermore, there are significant differences between clusters in the declared willingness to use online and conventional shopping channels—groups more environmentally-oriented are more willing to purchase online and trust online shops, although they neither perceive conventional retail in a more negative way nor directly prefer online over conventional channels. The nature of such a phenomenon is open to explanation and interpretation, nevertheless, the research proves that environmental attitudes should be included in future models of consumers’ channel choice.