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Product Fit Uncertainty in Online Markets: Nature, Effects, and Antecedents

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  • Yili (Kevin) Hong

    () (W. P. Carey School of Business, Arizona State University, Tempe, Arizona 85287)

  • Paul A. Pavlou

    () (Fox School of Business, Temple University, Philadelphia, Pennsylvania 19122)

Abstract

Product fit uncertainty (defined as the degree to which a consumer cannot assess whether a product's attributes match her preference) is proposed to be a major impediment to online markets with costly product returns and lack of consumer satisfaction. We conceptualize the nature of product fit uncertainty as an information problem and theorize its distinct effect on product returns and consumer satisfaction (versus product quality uncertainty), particularly for experience (versus search) goods without product familiarity. To reduce product fit uncertainty, we propose two Internet-enabled systems--- website media (visualization systems) and online product forums (collaborative shopping systems)---that are hypothesized to attenuate the effect of product type (experience versus search goods) on product fit uncertainty.Hypotheses that link experience goods to product returns through the mediating role of product fit uncertainty are tested with analyses of a unique data set composed of secondary data matched with primary direct data from numerous consumers who had recently participated in buy-it-now auctions. The results show the distinction between product fit uncertainty and quality uncertainty as two distinct dimensions of product uncertainty and interestingly show that, relative to product quality uncertainty, product fit uncertainty has a significantly stronger effect on product returns. Notably, whereas product quality uncertainty is mainly driven by the experience attributes of a product, product fit uncertainty is mainly driven by both experience attributes and lack of product familiarity. The results also suggest that Internet-enabled systems are differentially used to reduce product (fit and quality) uncertainty. Notably, the use of online product forums is shown to moderate the effect of experience goods on product fit uncertainty, and website media are shown to attenuate the effect of experience goods on product quality uncertainty. The results are robust to econometric specifications and estimation methods. The paper concludes by stressing the importance of reducing the increasingly prevalent information problem of product fit uncertainty in online markets with the aid of Internet-enabled systems.

Suggested Citation

  • Yili (Kevin) Hong & Paul A. Pavlou, 2014. "Product Fit Uncertainty in Online Markets: Nature, Effects, and Antecedents," Information Systems Research, INFORMS, vol. 25(2), pages 328-344, June.
  • Handle: RePEc:inm:orisre:v:25:y:2014:i:2:p:328-344
    DOI: 10.1287/isre.2014.0520
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    File URL: http://dx.doi.org/10.1287/isre.2014.0520
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    References listed on IDEAS

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    Cited by:

    1. repec:eee:jbrese:v:92:y:2018:i:c:p:260-269 is not listed on IDEAS
    2. Yabing Jiang & Hong Guo, 2015. "Design of Consumer Review Systems and Product Pricing," Information Systems Research, INFORMS, vol. 26(4), pages 714-730, December.
    3. repec:spr:elmark:v:29:y:2019:i:3:d:10.1007_s12525-018-0313-6 is not listed on IDEAS
    4. Liangfei Qiu & Asoo Vakharia & Arunima Chhikara, 2019. "Multi-Dimensional Observational Learning in Social Networks: Theory and Experimental Evidence," Working Papers 19-01, NET Institute.
    5. Christian Matt & Thomas Hess, 2016. "Product fit uncertainty and its effects on vendor choice: an experimental study," Electronic Markets, Springer;IIM University of St. Gallen, vol. 26(1), pages 83-93, February.
    6. repec:eee:proeco:v:204:y:2018:i:c:p:204-213 is not listed on IDEAS
    7. repec:spr:elcore:v:18:y:2018:i:3:d:10.1007_s10660-017-9266-7 is not listed on IDEAS

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