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ABSTRACT
of thesis entitled
A transaction cost perspective of online shopping
Despite the fact that the Internet adoption rate has increased among households in recent years, consumers’ online shopping activities have turned out to be much lower than originally expected. Many Internet users have abandoned Web stores after browsing them, even though some Web vendors are highly reputable and trustworthy and operate user-friendly and well-designed Web stores. An important issue is to understand the nature and influence of economic and non-economic factors that affect consumers’ channel preference for purchase. By drawing upon the transaction cost analysis (TCA) framework, anticipatory emotions literature and the theory of belief updating, this paper proposes and empirically tests a model that attempts to explain consumers’ channel preference for purchase.
The data for the study was obtained from a survey of 205 undergraduate students who were regular Internet users. These students were also consumers of our target product,
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mobile phones. The survey was administered in a computer room which had access to the Internet. Participants were required to learn how to purchase a mobile phone from a reputable commercial Web store before answering an online questionnaire. The partial least square technique, adopted in structural equation modeling, was used to analyze the data.
Our results indicate that (1) consumers prefer a shopping channel with lower perceived transaction costs in the form of time and worry; (2) higher seller’s specific investment results in lower consumers’ perceived transaction cost in the form of time but not worry; (3) higher buyer (or consumer)’s specific investment results in higher consumers’ perceived transaction cost in the form of time but not worry; (4) higher environmental and behavioral uncertainties results in higher consumers’ perceived transaction cost in the form of worry but not time; (5) the relationships between online...