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Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference

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  • Yunhui Huang

    (Department of Marketing and Electronic Business, School of Business, Nanjing University, 210093 Nanjing, China)

  • Kai H. Lim

    (Department of Information Systems, College of Business, City University of Hong Kong, Hong Kong)

  • Zhijie Lin

    (Department of Marketing and Electronic Business, School of Business, Nanjing University, 210093 Nanjing, China, Department of Management Science and Engineering, School of Economics and Management, Tsinghua University, 100084 Beijing, China, *Corresponding author)

  • Shunping Han

    (Department of Marketing and Electronic Business, School of Business, Nanjing University, 210093 Nanjing, China)

Abstract

Previous research has shown that because offline store space is costly, customers tend to associate large interstitial space among products in a bricks-and-mortar store with high price. Drawing on consumer inference and signaling theories, the present research suggests this offline association could be overgeneralized to online contexts and lead customers to illogically infer high price based on large interstitial space among products in an online product catalog (i.e., online product catalog space, OPCS). We conducted five experiments to test whether and why OPCS affects customers’ online store price perception and its downstream effect on store evaluation. Our findings indicate that (1) an online store with larger OPCS is perceived to be selling more expensive products (Study 1); (2) the effect of OPCS is due to offline–online overgeneralization rather than online learning, because either a reminder of offline–online differences (Study 2) or sufficient web design knowledge (Study 3) diminishes the effect of OPCS on store price perception, and only people who believe that large offline space is linked with high price show this effect (Study 4); and (3) customers who care more about quality evaluate a store with larger OPCS more positively, whereas customers who care more about price do the opposite (Study 5). These findings contribute to literatures on web design, price perception, consumer inference in e-commerce, and offline–online behavior transfer. We also discuss implications for practice and offer suggestions for future works.

Suggested Citation

  • Yunhui Huang & Kai H. Lim & Zhijie Lin & Shunping Han, 2019. "Large Online Product Catalog Space Indicates High Store Price: Understanding Customers’ Overgeneralization and Illogical Inference," Information Systems Research, INFORMS, vol. 30(3), pages 963-979, September.
    • Handle: RePEc:inm:orisre:v:30:y:2019:i:3:p:963-979
    DOI: 10.1287/isre.2019.0844
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