Reducing Online Buyers' Perceptions of Risk: A Study of Online Auctions

Abstract

While the popularity of online shopping and participation in online auctions continues to increase, online exchanges are characterized by the problem of information asymmetry as buyers tend to approach purchase situations with a good deal of trepidation. In the context of online auctions, buyers have access to a variety of information that can be used to assess the trustworthiness of sellers. The present study uses data from eBay to investigate the manner in which these types of information increase or decrease buyers' propensities to engage in the auctions and the amount buyers are willing to pay.

KEYWORDS:

• buyer behavior
• e-commerce
• market signals
• online shopping
• perceived risk

Notes

If the final bid is below the reserve price, the seller is not obligated to complete the transaction.