Mis PROPOSAL presentation Yaeeun Kim 03.23.2016 I know It’s Your Fault, But I Blame the Matchmaker: The Effect of Dissatisfying Purchase Experience in Intermediated E-Commerce Mis PROPOSAL presentation Yaeeun Kim 03.23.2016

Contents Research Objective and Motivation Theoretical Background and Hypotheses MIS perspective Marketing Research Conceptual Framework Method Expected Result Discussion and Further Research

1. Research Objective and Motivation 1. The characteristics of e-commerce Network effects or externalities in two-sided markets: when the utility derived by a particular individual from a good or a service depends on the number of individuals using it. (e.g. direct or indirect network effects) The role of platform or intermediary: 1) expert , 2) market maker (or match maker). E.g. Groupon, Amazon, etc. 2. Research motivation: The intermediated online business pertains ambiguity in recourse of responsibility when consumers experience dissatisfying purchase. 3. Research objective: When consumers experience dissatisfying purchase through intermediated online business, to whom they attribute their failure experience? The seller or the intermediary? Two sets of agents interact through an intermediary or platform The decisions of each set of agents affects the outcomes of the other set of agents, typically through an externality (Rysman, 2009) The utility of consumer increases when the number of users increases In a two-sided market, a “platform” company connects the seller and the buyer (Eisenmann et al., 2006; Järvi & Pellinen, 2011). Social commerce has intrigued researchers all around the world with its tremendous growth rate; however, two thirds of consumers have reported that they have had service failure experiences. Cases vary from those in which merchants were at fault to those in which the social commerce companies were at fault; this has motivated us to demonstrate consumers’ cognition of “the service failure experience” after purchasing goods or services at large discounts offered and recommended by the intermediary

2. Theoretical Background (1/2) MIS perspective Inherent characteristics of e-commerce Trust has been identified as a key prerequisite for the flourishing of online businesses, which serves to reduce perceived risks and social uncertainty. Interdependence in online business allow users rely on their expectation that the transaction partner will fulfill commitments and refrain from opportunistic behavior. Social cognitive theory applied in ICT Information system research has variously examined the decision making process by focusing on reciprocity and social influence on ICT attitudes and use. Cognitive structures constitute networks of information, affective evaluations, and associations that are stored in the user’s mind and used to interpret perceptions, appraise their judgement, and action. Hoffmann, C. P., Lutz, C., & Meckel, M. (2014). Digital Natives or Digital Immigrants? The Impact of User Characteristics on Online Trust. Journal of Management Information Systems, 31(3), 138-171.

2. Theoretical Background (2/2) Marketing perspective 1. Attribution theory (Heider, 1958; Russell, 1982) Consumers have a tendency to search voluntarily for the causes of products or service failures. Three components of attribution: 1) locus of causality, 2) stability, and 3) controllability. 2. Attribution-affect-behavior model (Piliavin et al., 1969; Weiner, 1980a; Kalamas et al., 2008) Appraisals from the causal inference process of a consumer will strongly affect his or her post purchase behavior Figure 1. Attribution-affect-behavior model

3. Research Conceptual Framework and Hypotheses Subsidy-side Money-side Platform provider Figure 2. Conceptual Framework

4. Method 300 online survey data (115 females, 185 males) Used path analysis and estimated the full structural equation model using Mplus 7.3 Five dependent variables (regret, disappointment, dissatisfaction, negative word-of-mouth, and repurchase intention) and three independent variables (internal, merchant, and social company) Table. Model fit

5. Expected Result As shown in the Figure, the path analysis (6 direct effects and 20 indirect effects) shows that H1, 2, 9, and 10 are significant, and H7 and 8 are marginally significant. The finding suggests that it is vulnerable both for the social company and merchants online, which is used as a channel of communication among current and potential consumers. Figure 3. Expected Result

6. Discussion and Further Research Contribution Expanded understanding of consumer appraisal in intermediated online business. Expanded attribution study by applying locus of causality to intermediary structure. Further research Investigate trust-transfer between intermediary and sellers. Confirmatory Factor Analysis. Can be applied with construal level theory.

Appendix