Product type
Nelson (1970) classified products into search and experience goods. The distinction is
based on the extent to which consumers can evaluate goods or their attributes prior to
purchase. In electronic commerce, communication is through the channel of Internet.
Weathers et al. (2007) took a slightly different view of the search/experience distinction.
They based classification on the extent to which consumers feel they need to directly
experience goods to evaluate quality. For experience goods, consumers need to directly
experience goods to evaluate quality, examples include apparels and musical
instruments. For search goods, consumers can make judgment of the quality
depending on second-hand information, examples include books and CDs. In online
markets, due to the spatial separation product can only be evaluated online when a
buyer is making a purchase decision. Buyer can relatively easily evaluate search
goods, but it is difficult to evaluate experience goods when making the purchase
decision. They may have different risk perception for search and experience goods.
Thus, it is reasonable to believe that product type may influence the buyer’s perceived
risk for a BIN transaction.
Product type is related to buyer’s perceived risk in BIN auctions on online C2C
market. Online buyers have higher perceived risk for experience goods than
search goods.
To investigate the consumer behaviors in online market, we used web-based
experiment method to gain better control, flexibility and validity (Wade and Tingling,
2005). A web-based experiment system was developed to simulate the interface and
transaction process in online C2C market. The structure and functions of the
experiment system is described in Lin and Xu (2005). When conducting experiment on
the system, human subjects were provided with various information on the interface,
including product type, price, seller reputation score, and so on. Then they were asked
to make decision on whether to conduct the purchase and whether to use OES. The
experience is very similar to the real BIN auctions on online C2C markets such as
eBay.com and Taobao.com