The effect of online word-of-mouth in electronic markets: An investigation of the culture differences in the Chinese and U.S. contexts

Abstract

Feedback profiles could affect both prices and the probability of sales. However, cultural mindset interprets the online feedback differently, which is likely to result in the variation of online trading behavior. The previous studies have been long downplayed in the online trading behavior. With the growing amount of Chinese E-Commerce, we ask whether the western e-commerce model works in the Chinese Context. This study attempts to explore and compare the effect of online word-of-mouth on trust building, and price premium in Chinese and U.S. Contexts. We propose that collectivism would increase the buyer's reliance on the feedback profile. Risk avoidance moderates the association between information of feedback profile and price premium. Structural equation model and regression techniques will be employed to analyze the data collected from online auctions and questionnaires. Future research opportunities are identified.