Buyer's Willingness Research Articles

Willingness of Buyers to Buy Wearable Rejected Clothes from Clothing Manufacturers: Model for Fostering Sustainable Apparel Business

The apparel industry in Bangladesh produces rejected garments while manufacturing high-quality exportable garments. This industry faces challenges in managing rejected garments as they contribute to waste generation. The purpose of this study was to explore the current policy of managing rejected garments and look for a more sustainable business model or policy. This research collected opinions and information from 18 different garment manufacturing industries regarding rejected garments and buyers’ and manufacturers’ existing policies for managing the rejected garments. The results of the study show that there is no particular guideline from the buyers for managing rejected garments; consequently, the manufacturers handle these garments in their own way. A novel and more sustainable business model for the clothing business was proposed to align the business with the Sustainable Development Goal 12 (responsible consumption and production). This model urges collaborative efforts between buyers and manufacturers to capture more value from rejected garments and extend their lifecycle. The proposed framework will benefit relevant stakeholders, minimise waste generation and reduce the impact of fast fashion.

Technology-Driven Economic Behaviours: The Role of Willingness to Disclose Personal Data in Online Buying and Webrooming

Digitalization predetermines variety of economic behaviours that either happen online or integrate online and offline options. For instance, omni-channelling in retail gives buyers options of e-buying and webrooming (searching online, but purchasing offline). This paper highlights the role of willingness of buyers to disclose their personal data in regard to the two behaviours. The willingness is impacted by perceived benefits, privacy risks and trust in a store; relationships between all factors are grounded on social exchange theory. Empirical data from 964 respondents were analysed with the use of structural equation modelling. The findings showed indirect effect of willingness to disclose personal data on webrooming, clarified the way how privacy risks impact the willingness in regard to the two behaviours and confirmed the impact of online buying on webrooming. This way they helped to reduce addressed research gaps and present a substantial novelty.

Consumer decision journey for online group buying: psychological and intentional procedure perspectives

PurposeThis study investigates the relationship between buyers’ psychological antecedent and repurchase intentions in online group buying. Considering and evaluating pre-purchase, the authors measure the buyers’ overall experience of online group buying through their perceived value (PV) and risk. This study examines the influence of PV and perceived risk (PR) on positive electronic word-of-mouth (eWoM) communication and repurchase intention in online group buying.Design/methodology/approachThe authors verify the research model using SPSS and the structural equation modeling-partial least square (SEM-PLS) to analyze 839 convincing respondents. This quantitative research provides insights into online group buying, including the food industry.FindingsThe results demonstrate that the buyers’ PV of online group buying enhanced positive eWoM communication and repurchase intention. The willingness of buyers to spread positive eWoM indicates their recognition and satisfaction with a product or brand. Thus, they have the behavioral intention to repurchase in online group buying. The study found that while positive eWoM communication significantly impacts repurchase intention, PR negatively affects PV. The research provides theoretical and practical implications at the end of the study.Research limitations/implicationsThis study has some limitations. First, the study only used PV and PR to measure consumers’ considerations and evaluations of the initial stage in the consumer decision journey. Future studies can include more dimensions that may further affect these considerations and assessments to verify the research model. Second, the study only used positive eWoM communication to measure the “enjoy-advocate-bond” of consumption and usage in the post-purchase stage.Originality/valueThe study proposes the sequential relationship in the psychological decision procedure of participating in online group buying and provides valuable managerial implications for managers operating online group buying on third-party platforms. The findings provide good knowledge for the food industry to stay connected with customers and develop their satisfaction.

Removal and reconstruction: Multi-period price effects on nearby housing from urban village redevelopment

The removal and reconstruction of urban villages can improve the residential environment in the vicinity and promote the willingness of buyers to pay. A detailed investigation of the price effects on nearby housing generated by urban village redevelopment helps to capture the added value of public investment. Previous studies often ignore the temporal variation of the price effects. Furthermore, they confuse the price effects from the removal of dilapidated housing and the construction of new buildings. Based on the listing prices in 2017–2018 and transaction data in 2015 of secondhand residential housing in Hangzhou, China, this paper built a multi-period difference-in-differences model to examine the multi-period price effects from urban village redevelopment on nearby housing and to isolate the removal effects of old buildings and the amenity effects of reconstruction. The results show that (1) An anticipatory effect of up to 13% occurs before the urban village redevelopment; removal and reconstruction will bring a total premium of 20% to nearby housing prices; and the total price effects gradually increase in time and slightly fall back after four years. (2) Less than 15% of the added value comes from the removal of dilapidated housing in an urban village, while more than 85% comes from the reconstruction of new buildings. (3) The price effects of large-scale urban village redevelopment are much more obvious.

A Differential Motivation Account for the Disparity between Willingness to Accept and Willingness to Pay

We take a motivated reasoning perspective to examine the robust finding that a seller's willingness to accept (WTA) to give up a good is typically higher than a buyer's willingness to pay (WTP) to obtain the good. We propose that the seller/buyer role and/or the WTA/WTP elicitation activate different motivations. Four studies, using different ways to test for motivational processes, demonstrate how motivational processes influence the WTA‐WTP disparity in a predictable and systematic way. Study 1 shows that the WTA/WTP elicitation activates distinct motivations and that altering the medium of exchange reverses the motivations. Study 2 shows that eliciting WTA/WTP using an auction mechanism activates multiple motivations, attenuating the WTA‐WTP disparity. Study 3 demonstrates that activating regulatory focus that is inconsistent (vs. consistent) with the motivation activated by the WTA/WTP elicitation attenuates the WTA‐WTP disparity. Study 4 demonstrates that WTA/WTP elicitation may bias perceptions of an ambiguous stimulus and that the WTA‐WTP disparity increases with delay. Together, our findings provide new insights into the valuation of sellers and buyers by highlighting the role of motivational processes underlying the WTA‐WTP disparity.

DIMENSIONS OF SERVICE OFFER, AS AN ASSUMPTION OF BUILDING LONG TERM RELATIONS WITH THE CUSTOMERS OF TELECOMMUNICATION SERVICES / DIMENZIJE USLUŽNE PONUDE KAO PRETPOSTAVKA GRAĐENJA DUGOROČNIH ODNOSA SA KUPCIMA TELEKOMUNIKACIJSKIH USLUGA

he purpose of this paper is expressed in the need to research the significance of individual dimensions of service offers for customers and their influence to readiness to build long-term relations with the company BH Telecom Sarajevo. The subject of the research are dimensions of service offers and their influence to the possibility of building long-term relations and cooperation between service provider and customers, namely inclinations of customers to “get attached” to their telecom provider. The goal of the research is defined in the need to ascertain which sub-dimensions of service offer is the most significant assumption of building long-term relations with customers, starting with the belief that mutual cooperation will be created and that it will ensure values for participants in the service process. The research deepens the comprehension of the influence of dimensions of service offer to the willingness of buyers for building of relations, which is considered to be a key assumption for customer loyalty to the company. Based on the results of research it is possible to conclude that three sub-dimensions of service offer have a direct and positive influence to the dimension of willingness of customers for building relations with the company BH Telecom, which include materialization of offer, followed by the brand and company image, whereas it least depends on the service quality and process of service providing, which refers to the conclusion that the customer perceives in advance satisfactory level of quality and level of provided service.

BUYER’S WILLINGNESS TO PAY FOR DWELLINGS WITH DIFFERENT ORIENTATIONS

This paper applies spatial hedonic econometric models to estimate the willingness of buyers to pay for dwellings with different orientations based on a data set comprising 63 306 transactions of secondhand apartment sales in 10 districts in Beijing from October 2011 to September 2014. Our results indicate that apartments with South orientation are sold at a 7.8% premium compared with those with West orientation, and that apartments in ancient city areas are more sensitive to orientation. The obtained results can help architects and developers to maximize the value of development projects by optimizing the layout of apartment units on each floor.

Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices

In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other fac...

AN EQUITY THEORY VIEW OF PERSONAL INFORMATION DISCLOSURE IN AN ONLINE TRANSACTIONAL EXCHANGE

This study draws upon equity theory to present a conceptual model for the study of personal information disclosure in an online buyer-seller transactional exchange. Prior research studies have utilized social contract and principal-agent theories to explain how information privacy concerns influence consumers’ intentions to provide their personal information to online sellers. Herein, equity theory is viewed as another “fairness and justice” lens through which online information privacy concerns can be explored while accommodating a broader set of situational factors, e.g., vendor loyalty, that also influence a buyer's willingness to provide their personal information to an online seller. The model operationalizes the “distress” construct that, according to equity theory, acts as an equity restoration mechanism and explores its mediation effects. Results of this empirical study show that event-driven distress can positively motivate an individual to provide personal information; and, that it can mediate the impact of certain situational factors on an individual’s willingness to provide personal information. Finally, vendor loyalty is conceptualized as a broadening of the “personalization” concept from the personalization-privacy paradox literature. It was also determined that “marital status” was significant in affecting one’s intention to disclose personal information while the significance of “age” was deemed inconclusive.

Conflicts of Interest and Steering in Residential Brokerage

This paper documents uniformity in real estate commission rates offered to buyers' agents using 653,475 residential listings in eastern Massachusetts from 1998–2011. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5 percent less likely to sell and take 12 percent longer to sell. These adverse outcomes reflect decreased willingness of buyers' agents to intermediate low commission properties (steering), rather than heterogeneous seller preferences or reduced effort of listing agents. Offices with large market shares purchase a disproportionately small fraction of low commission properties. The negative outcomes for low commissions provide empirical support for regulatory concerns over steering. (JEL D82, L85, R21, R31)

Conflicts of Interest and Steering in Residential Brokerage

This paper documents uniformity in real estate commission rates offered to buyers’ agents using 653,475 residential listings in eastern Massachusetts from 1998–2011. Properties listed with lower commission rates experience less favorable transaction outcomes: they are 5 percent less likely to sell and take 12 percent longer to sell. These adverse outcomes reflect the decreased willingness of buyers’ agents to intermediate low commission properties (steering), rather than heterogeneous seller preferences or reduced effort of listing agents. Offices with large market shares purchase a disproportionately small fraction of low commission properties. The negative outcomes for low commissions provide empirical support for regulatory concerns over steering.

Interest Rates and Housing Market Dynamics in a Housing Search Model

We introduce mortgages into a dynamic equilibrium, directed search model of the housing market. Mortgage rates play their natural role in our model by affecting the share of per-period income that a homeowner spends on mortgage payment rather than consumption. We estimate the model using microdata on home listings, exploiting the insights of Menzio and Shi (2010) to handle the significant heterogeneity that even basic mortgages introduce into a search model. The estimated model shows that, because of search frictions, housing market conditions are significantly more responsive to mortgage rates than suggested by reduced-form correlations of rates with house prices. Buyer willingness to pay for the typical home changes by more than twice as much as average house prices in response to an interest rate change. As in the data, home construction is more rate sensitive than prices in our model.

Spatial and Social Media Data Analytics of Housing Prices in Shenzhen, China

Housing is among the most pressing issues in urban China and has received considerable scholarly attention. Researchers have primarily concentrated on identifying the factors that influence residential property prices and how such mechanisms function. However, few studies have examined the potential factors that influence housing prices from a big data perspective. In this article, we use a big data perspective to determine the willingness of buyers to pay for various factors. The opinions and geographical preferences of individuals for places can be represented by visit frequencies given different motivations. Check-in data from the social media platform Sina Visitor System is used in this article. Here, we use kernel density estimation (KDE) to analyse the spatial patterns of check-in spots (or places of interest, POIs) and employ the Getis-Ord method to identify the hot spots for different types of POIs in Shenzhen, China. New indexes are then proposed based on the hot-spot results as measured by check-in data to analyse the effects of these locations on housing prices. This modelling is performed using the hedonic price method (HPM) and the geographically weighted regression (GWR) method. The results show that the degree of clustering of POIs has a significant influence on housing values. Meanwhile, the GWR method has a better interpretive capacity than does the HPM because of the former method’s ability to capture spatial heterogeneity. This article integrates big social media data to expand the scope (new study content) and depth (study scale) of housing price research to an unprecedented degree.

Nonlinear pricing and exclusion:II. Must‐stock products

Dominant firms often are unavoidable trading partners. Buyers may consider switching a fraction of their requirements to rival products, but that fraction is highly uncertain in rapidly evolving industries. Nonlinear pricing serves to adjust the competitive pressure placed on rival firms, depending on the joint distribution of the buyer willingness to pay for the rival's good and the share of contestable demand. Concave price‐quantity schedules erect barriers to entry. Convex parts in schedules introduce barriers to expansion. Dominant firms use all‐units discounts to create high entry barriers for rival firms with intermediate levels of contestable demand.

Is it really worth it? A test of pay-what-you-want pricing strategies in a German consumer behaviour context

This paper focuses on the factors that significantly influence an individual's decision in establishing a price for a standardised product under so-called pay-what-you-want (PWYW) circumstances. Current research has identified seven influential constructs that are assumed to be the main drivers of consumer behaviour when making a pricing decision in a PWYW environment: fairness, altruism, loyalty, price consciousness, income, satisfaction and reference price. This paper extends the list of influential factors with an additional construct, situational factors and examines the constructs' relative importance with regard to their influence on a PWYW decision. Moreover, the positive effect of personal interaction on a buyer's willingness to pay during a payment situation in the PWYW context was confirmed.

Sustainability or Bust: Malaysian Home Buyers’ Stated Preferences for Sus-Tainable Housing

The lack of data on sustainable home buying behaviour in developing countries such as Malaysia is due to the absence of sustainable housing itself. However, it is still possible to solicit home buyers for their stated preferences and quantify its effects on housing demand. In this study, a sample of 300 responses to a Discrete Choice Experiment (DCE) on sustainable housing features was analysed using the support.CEs program. This study found that the addition of sustainable features; renewable energy generation, enhanced soundproofing and ventilation, energy saving features, and higher green area ratios significantly increase home buyer's willingness to pay (WTP) for sustainable housing.

The Informational Role of Product Trade‐Ins for Pricing Durable Goods

This research theorizes that sellers of durable goods can utilize inferences about the buyer's willingness to pay based not only on her decision to trade in the old good but also on its characteristics. We find empirical support for this theory using transaction data for new car purchases. The results support the notion that dealers infer a higher willingness to pay and charge higher prices to consumers who trade in a used vehicle than to those who do not. We also find that dealers charge even higher prices to those consumers who trade in used cars that are similar to the new one.

Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets

Pay what you want (PWYW) can be an attractive marketing strategy to price discriminate between fair-minded and selfish customers, to fully penetrate a market without giving away the product for free, and to undercut competitors that use posted prices. We report on laboratory experiments that identify causal factors determining the willingness of buyers to pay voluntarily under PWYW. Furthermore, to see how competition affects the viability of PWYW, we implement markets in which a PWYW seller competes with a traditional seller. Finally, we endogenize the market structure and let sellers choose their pricing strategy. The experimental results show that outcome-based social preferences and strategic considerations to keep the seller in the market can explain why and how much buyers pay voluntarily to a PWYW seller. We find that PWYW can be viable on a monopolistic market, but it is less successful as a competitive strategy because it does not drive traditional posted-price sellers out of the market. Instead, the existence of a posted-price competitor reduces buyers' payments and prevents the PWYW seller from fully penetrating the market. When given the choice, most sellers opt for setting a posted price rather than a PWYW pricing strategy. We discuss the implications of these results for the use of PWYW as a marketing strategy. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.1946 . This paper was accepted by Uri Gneezy, behavioral economics.

Bargaining Ability and Competitive Advantage: Empirical Evidence from Medical Devices

In markets where buyers and suppliers negotiate, supplier costs, buyer willingness to pay, and competition determine only a range of potential prices, leaving the final price dependent on other factors (e.g., negotiating skill), which I call bargaining ability. I use a model of buyer demand and buyer–supplier bargaining, combined with detailed data on prices and quantities at the buyer–supplier relationship level, to estimate firm-bargaining abilities in the context of the coronary stent industry where different hospitals (buyers) pay different prices for the exact same product from the same supplier. I estimate that (1) variation in bargaining abilities explains 79% of this price variation, (2) bargaining ability has a large firm-specific component, and (3) changes in the distribution of bargaining abilities over time suggest learning as an important channel influencing bargaining ability. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mnsc.2014.2006 . This paper was accepted by Bruno Cassiman, business strategy.

Pay What You Want as a Marketing Strategy in Monopolistic and Competitive Markets

Pay What You Want (PWYW) can be an attractive marketing strategy to price discriminate between fair-minded and selfish customers, to fully penetrate a market without giving away the product for free, and to undercut competitors that use posted prices. We report on laboratory experiments that identify causal factors determining the willingness of buyers to pay voluntarily under PWYW. Furthermore, to see how competition affects the viability of PWYW, we implement markets in which a PWYW seller competes with a traditional seller. Finally, we endogenize the market structure and let sellers choose their pricing strategy. The experimental results show that outcome-based social preferences and strategic considerations to keep the seller in the market can explain why and how much buyers pay voluntarily to a PWYW seller. We find that PWYW can be viable in isolation, but it is less successful as a competitive strategy because it does not drive traditional posted-price sellers out of the market. Instead, the existence of a posted-price competitor reduces buyers’ payments and prevents the PWYW seller from fully penetrating the market. If given the choice, the majority of sellers opt for setting a posted price rather than a PWYW pricing. We discuss the implications of these results for the use of PWYW as a marketing strategy.