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UNITY IS STRENGTH: UNDERSTANDING USERS GROUP BUYING BEHAVIOR IN TAIWAN FROM A COLLECTIVISM PERSPECTIVE

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Journal of Electronic Commerce Research, VOL 16, NO 2, 2015 UNITY IS STRENGTH: UNDERSTANDING USERS GROUP BUYING BEHAVIOR IN TAIWAN FROM A COLLECTIVISM PERSPECTIVE Chiahui Yen 1 Department of International
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Journal of Electronic Commerce Research, VOL 16, NO 2, 2015 UNITY IS STRENGTH: UNDERSTANDING USERS GROUP BUYING BEHAVIOR IN TAIWAN FROM A COLLECTIVISM PERSPECTIVE Chiahui Yen 1 Department of International Business Ming Chuan University 250 Zhong Shan N. Rd., Sec. 5, Taipei 111, Taiwan Chun-Ming Chang Department of Tourism Information Aletheia University No.32, Chen-Li St., Tamsui, Taipei County, 251, Taiwan ABSTRACT This study proposes a theoretical model from a collectivism perspective to examine the factors affecting buyers motivation to engage in auctions through online group-buying websites. The model was tested using the data collected from 218 buyers participating in a Taiwan online group-buying website. The results show that the intention to participate in online group-buying auctions significantly affected group-buying behavior, while conformity, attitude, and collective efficacy had significant influences on the intention to participate in online group-buying auctions. The results also indicate that trust in websites, trust in auction initiators, and trust in buyers are the antecedents of attitudes toward online group-buying auctions. Implications for theory and practice and suggestions for future research are discussed. Keywords: Online group-buying auctions; Collective efficacy; Trust; Conformity; Theory of planned behavior (TPB) 1. Introduction Recent e-commerce developments have created new opportunities for marketers to develop innovative selling strategies [Jing and Xie 2011] and provide a diverse range of transaction types for consumers as well. Among the various types of business models emerging, online group-buying constitutes a substantial proportion of the online customer market. Group-buying auctions, such as Groupon, are transaction mechanisms in which buyers are recruited in order to generate volume orders, so as to create a basis for lower transaction prices [Kauffman et al. 2010a]. By the end of 2012, Groupon had 41 million active customers. Moreover, according to the China E-Business Research Center, an independent research institute, the transaction value of the group buying market in China reached US$5.5 billion in 2012 [Statista 2013]. Because online group-buying is a unique phenomenon and more complex than traditional e-commerce models (e.g. business to customers (B2C) or customers to customers (C2C)), group-buying auctions provide interesting and novel opportunities for both practitioners and researchers. Prior information systems (IS) and marketing researchers have discussed online group-buying in different ways. Some studies have stressed the functionality and usability of group buying systems [Zhu et al. 2010; Tsai et al. 2011]. Their findings show that technological factors such as navigation functionality, communication support and systems quality can enhance the buyers perceptions of shopping experiences. Some studies have concentrated on determining the basic antecedent variables for group-buying arising from psychological factors [Chen 2012; Shiau and Luo 2012; Cheng and Huang 2013; Wang and Chou 2014]. For example, the reciprocity and reputation of a buying group, the relational and structural embeddedness of initiators, as well as the price consciousness and price sensitivity of buyers have all been analyzed. Other studies have focused on the important role trust plays in affecting group-buying intention [Ku 2012; Shiau and Luo 2012]. Although a substantial number of studies have been carried out to explore the critical factors that affect buyers purchasing behavior, the present study attempts to address two research gaps by proposing a novel model and empirically testing buyers purchasing behavior in terms of the group nature of action. 1 Corresponding author Page 109 Yen & Chang: Understanding Users Group Buying Behavior First, since B2C and C2C are characterized as individualistic in nature, whereas group buying auctions are collectivistic [Bin and Sun 2004; Wei et al. 2011; Noh et al. 2013], relatively few studies have examined online group-buying auctions in terms of social and psychological factors from a collectivism perspectives. Online groupbuying auctions can be viewed as buyer-driven sites, where buyers can form buying groups by their own initiative to generate volume orders to purchase the products they want. Once enough buyers are recruited to purchase a minimum quantity of products, the auction initiators will negotiate with vendors over prices to get volume discounts [Kauffman et al. 2010a]. Since buyers can leverage their collective bargaining power to lower the prices at which they buy the products, there is no guarantee that all buyers will purchase goods at the lowest prices available in the online group-buying auction [Kauffman et al. 2010a]. Compared with individual intention, collective intention highlights the individual commitment in collectivity and the social nature of group action [Cheung et al. 2011]. However, in prior studies exploring the antecedents of online group-buying behavior [Tsai et al. 2011; Chen 2012; Ku 2012; Shiau and Luo 2012; Cheng and Huang 2013], the construction of an online group-buying model based on the nature of group action has been for the most part neglected. Thus, the present study attempts to address this gap by proposing a model and empirically testing buyers purchasing behavior from a collectivism perspective. Furthermore, while past studies have indicated that there is a strong link between trust and purchasing behavior in e-commerce settings, little empirical evidence has been provided in terms of decomposing trust as a multidimensional construct in group-buying environments. Online group-buying auctions generally create buyer uncertainty during the transaction process, while dynamic pricing mechanisms for group-buying cannot ensure that all buyers will continue with their participation [Kauffman and Wang 2002]. Without enough buyers, a group purchasing transaction will not succeed. Previous research has found that a lack of trust is one of the most significant reasons why consumers hesitate to make internet purchases or avoid making them altogether [Gefen 2000]. For instance, B2C hinges on the importance of trust in websites, while C2C emphasizes trustworthiness between buyer and seller. In contrast, online group-buying auctions highlight the role of trust in other buyers within the buying group. Thus, online group-buying auctions involve three players with distinctive roles, i.e. the website, the initiators, and buyers. However, to date, there has been no attempt by researchers to explore the multidimensional effect of trust on group-buying auctions. Therefore, it becomes critical to examine the factors that motivate all buyers to trust online group-buying auctions from the divergent perspectives of those three roles. Explaining user acceptance of new technology is often described as one of the most mature research areas in the contemporary IS literature [Venkatesh et al. 2003]. Several theories have been developed to explain user behavior across a broad range of end-user information technologies (IT). The Technology acceptance model (TAM) postulates that attitude toward a particular object depends on the direct effects of beliefs about the object, and that attitude also have a direct positive impact on behavioral intention toward the object [Davis et al. 1989]. The Unified Theory of Acceptance and Use of Technology (UTAUT) [Venkatesh et al. 2003] is another parsimonious model of individual acceptance of new IT in the workplace. In addition, the Theory of planned behavior (TPB) has been shown to be a robust model that can be used to explain most human behaviors [Ajzen 1991]. TPB asserts that an individual s behavior is determined by his or her intention to perform a specific behavior, which in turn is determined by subjective norms, attitudes, and perceived behavioral control (PBC). Consequently, TPB has been applied to conceptualize extended models to predict individuals behavior in various settings, including B2C e- commerce [Bhattacherjee 2000; Lim and Dubinsky 2005; Hsu et al. 2006; Pavlou and Fygenson 2006] and IS usage continuance [Mathieson 1991; Hsieh et al. 2008; Lee 2010; Sun et al. 2013]. Therefore, we specifically reconceptualize the TPB model to identify the constructs that can be applied in the context of online-group buying from a collectivism perspective. There are at least two reasons for adopting a TPB-based model to understand buyers purchasing behavior in online group-buying auctions in the current study. First, TPB provides a fuller understanding of usage intention and behavior compared to other IT acceptance models [Taylor and Todd 1995]. TAM makes it easier to predict usage, but only supplies very general information on users opinions about a IT system. TPB, in comparison, provides more specific information that can better guide development of IT/website implementation [Mathieson 1991]. Second, compared to UTAUT constructs, TPB constructs are more compatible with the online group-buying auction context. Some of the UTAUT constructs, i.e. social influence, and facilitating conditions are significant in mandatory contexts, but less so in voluntary contexts. Hence, a TPB based model is suitable to recognize buyers intentions and behavior in a group-buying auction environment. In this study, the research questions to be addressed are: 1) How do influences from other buyers affect a buyer s behavioral intention and attitude? 2) How does users behavior control play a vital role in shaping a buyer s intention to participate in group-buying auctions and online group-buying behavior? 3) How do the different types of trust affect a buyer s attitude toward online group-buying auctions? The organization of this paper is described as follows. The next section presents the literature review on TPB, conformity, collective efficacy, and trust. A Page 110 Journal of Electronic Commerce Research, VOL 16, NO 2, 2015 discussion of the research model and hypotheses follows. We then describe the data collection, analysis, and model testing. Finally, this paper ends with a conclusion giving implications of the findings and suggestions for possible future research. 2. Theoretical background and research model This study reconceptualizes TPB from a collectivism perspective. The remainder of this section describes the logic and empirical support for each hypothesis of the research model shown as Figure 1. Constructs of collectivism are contained within the dotted line square, while TPB constructs are presented as gray ovals. Trust in website Conformity H3 Gender Control Variables Buying frequency H7 H4 Trust in auction initiators Trust in buyers H9 H8 Collective efficacy Attitude toward groupbuying auctions H5 H6 H2 Intention to participate in group-buying auctions Constructs of collectivism perspective H1 Group-buying behavior TPB Constructs Figure 1: Research Model 2.1 Theory of planned behavior (TPB) TPB views individual behavior as being primarily determined by behavioral intention. Behavioral intention refers to how hard people are willing to try to perform a behavior [Ajzen 1991; Bhattacherjee 2000; Pavlou and Fygenson 2006]. The link between behavioral intention and actual behavior has been investigated in a wide variety of contexts. For instance, Hsu and Chiu [2004] found that a user s behavioral intention to use e-service is a significant determinant of his or her actual use of that service. Previous e-commerce research also found that a buyer s behavioral intention to use a virtual store is a strong predictor of his or her actual use of that store [Pavlou and Fygenson 2006]. Therefore, the following hypothesis is proposed. H1: Buyers intention to participate in group-buying auctions is positively associated with use of group-buying websites. Attitude refers to one s overall evaluation of performing a specific behavior. Attitude toward a specific behavior refers to the degree to which a person holds a favorable or unfavorable evaluation or appraisal of the behavior in question [Ajzen 1991]. In this study, attitude toward online group-buying auctions represents the degree to which a person holds positive feelings toward participation in online group-buying auctions. In accordance with TPB, a favorable attitude toward an act or event should give rise to a positive intention to perform the act or participate in the event. Several marketing and IS studies have found that attitude has a positive impact on behavioral intention [Jarvenpaa et al. 2000; Chen and Dibb 2010]. Hence, H2: Buyers attitudes toward group-buying auctions are positively associated with their intention to participate in group-buying auctions. 2.2 Conformity Conformity is represented by the TPB construct of subjective norm in this study. According to Ajzen [1991], subjective norm reflects a person s perception of the expectations of others about a specific behavior. Conformity refers to the degree to which a person will change his behavior in order to match or imitate the beliefs or behavior of others [Cialdini and Trost 1998], and has been identified as an important factor that will affect an individual s behavior [Kim and Park 2011]. Lee [1990] suggests that conformity is a stronger social pressure construct that can substitute for the subjective norm construct of TPB. Researchers also report that consumers will purchase products Page 111 Yen & Chang: Understanding Users Group Buying Behavior due to overt conformity pressures from peer groups [Calder and Burnkrant 1977; Bearden and Rose 1990; Lascu et al. 1995]. In the online group-buying context, prices of products will decrease as more buyers join auctions. Buyers in this sense tend to participate in group-buying auctions to obtain lower prices when the numbers of buyers of a given product increase [Kauffman et al. 2010b]. This implies that influences from other buyers will affect all buyers purchase intention. Hence, conformity is considered as a social pressure factor and is used to capture buyer perceptions of whether participating in online group-buying auctions is encouraged and affected by other buyers [Pavlou and Fygenson 2006]. Prior literature has suggested a positive link between conformity and behavioral intention [Calder and Burnkrant 1977; Bearden and Rose 1990; Lascu et al. 1995]. Tajfel and Turner [1986] assert that individuals will engage in a pro-social behavior, such as online group-buying auctions, since they want to be perceived positively and accepted by group members [Ma and Agarwal 2007; Kim and Park 2011]. Building on the preceding theoretical literature, the following hypothesis is proposed. H3: Conformity is positively associated with buyers intentions to participate in group-buying auctions. Previous literature posits that an individual perceiving others consensus on her identity can develop a sense of understanding, which in turn promotes positive attitudes [Ma and Agarwal 2007]. In addition, researchers have argued that individuals attitudes tend to be group-determined, rather than individually-determined, when they are motivated to engage in a pro-social behavior by social influence [Lee 1990; Bock et al. 2005]. In this sense, it seems reasonable to posit that conformity will influence buyers attitudes toward online group-buying auctions. Bock et al. [2005] reveal that social influence positively affects attitude toward knowledge sharing, which is similar to the findings of Lee et al. [2008] in the context of online shopping. Therefore, H4: Conformity is positively associated with buyers attitudes toward group-buying auctions. 2.3 Collective efficacy In order to fit the context of online group-buying auction, collective efficacy was used to substitute for the TPB construct of PBC. Ajzen [1991] argued that PBC refers to an individual s perception of the ease or difficulty of performing a specific behavior. According to Social Cognitive Theory [Bandura 2000], collective efficacy is an extension of the concept of perceived self-efficacy. Collective efficacy refers to a group s shared belief in the conjoint capability to attain goals and accomplish tasks as a group [Illia et al. 2011]. Moreover, the formation of collective efficacy by team members is influenced by that team s past performance [Gibson 1999]. Prior literature argues that collective efficacy is stored in the minds of the individuals in the group [Hannah et al. 2008]. Bandura [2000] further posits that collective efficacy operates within individuals in a similar way to the process of selfefficacy. Some literature also reports that collective efficacy exerts greater influence in group-level settings. It has been suggested that a lack of confidence in group capability restrains collective actions [Illia et al. 2011]. Since the goal of group-buying auctions is to augment the power of buyers to negotiate lower prices, buyers believe that buying as a group will help them achieve their desired outcomes. Accordingly, it is reasonable to use collective efficacy to reflect a buyer s perception of the ease or difficulty of putting online-group buying intention into action. In this regard, the current study proposes that collective efficacy plays a vital role in determining buyers intention and use of group-buying websites. This leads to the following hypotheses: H5: Collective efficacy is positively associated with buyers intentions to participate in group-buying auctions. H6: Collective efficacy is positively associated with the use of group-buying websites. 2.4 Trust Trust refers to the willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party [Mayer et al. 1995]. Considered as a pivotal mechanism governing social exchange relationships in e-commerce, trust creates positive expectations that vendors will fulfill obligations set forth in the exchange [Panteli and Sockalingam 2005]. In this sense, trust serves as a driving force for buyers positive attitudes toward shopping online [Jarvenpaa et al. 2000; Pavlou and Fygenson 2006; Qureshi et al. 2009; Komiak and Benbasat 2010]. Heretofore, prior research on trust has treated it as a multidimensional concept [Chen and Dibb 2010], which, depending on the targets of trust in online settings, can be divided into system trust and interpersonal trust [Hsu et al. 2011]. System trust, a belief that proper impersonal structures have been put into place to support the likelihood of successful social exchanges [Pennington et al. 2003], reflects the willingness of the trustor to behaviorally count on an information system to perform a task [Hsu et al. 2011]. As online group-buying auctions are supported by information technology and technical infrastructure with sufficient security procedures and protection mechanisms, this will provide buyers with a sense of security to alleviate their concerns [Pavlou et al. 2007]. Accordingly, H7: Trust in websites is positively associated with buyers attitude toward group group-buying auctions. Interpersonal trust, defined as one party s willingness to depend on the other party with a feeling of security Page 112 Journal of Electronic Commerce Research, VOL 16, NO 2, 2015 even when negative consequences are possible [Pennington et al. 2003], is found in the context of interpersonal relationships [Li et al. 2008; Hsu and Chang 2012]. Scholars have identified numerous forms of interpersonal trust based on the targets in the exchange relationships. For instance, Morgan and Hunt [1994] categorize trust into trust in the salesperson and trust in the seller organization, while Mach et al. [2010] classify trust into trust in players, trust in coaches, and trust in top managers. A successful online-group-buying transaction is not only the result of the auction initia
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