Prior research has found out that online agents derive higher price sensitivity on consumers from price competition. On the contrary, Linch and Ariely(2000) contend that online agents make price sensitivity lower by providing distinct product qualitie...
Prior research has found out that online agents derive higher price sensitivity on consumers from price competition. On the contrary, Linch and Ariely(2000) contend that online agents make price sensitivity lower by providing distinct product qualities intensely.With regard to these opposite opinions, we suggest that the cohesiveness of information provided by online agents may affect the price sensitivity of consumers. This is a creative point of view about online agents' effects on price sensitivity.We carried out 3 experiments in order to prove our hypotheses. In Experiment 1, we found out that if online agents provide product information more cohesively, consumers pay more attention to the quality of alternatives than price, and then their price sensitivity become blunt. On the other hand, when online agents provide information less cohesively, consumers take more notice of the price of the alternatives than their quality, and this makes their price sensitivity higher. That is, cohesiveness of information provided by online agents affected the price sensitivity of consumers. Attention of attributes information mediated price sensitivity of consumers.In Experiment 2, we included the possibility inferred by prior researches that the price level of product category may impact the cohesiveness of price sensitivity. According to the results, cohesiveness of information affected price sensitivity of low-priced product only, whereas, it does not in case of higher-priced product.On the other hand, we suggested an alternative explanation that cohesiveness of information might brings features of product category (attention to price vs. attention to quality) into largely and could influence price sensitivity in experiment 2. That is to say, when the attributes information of the price-attention product category is given cohesively, consumers tend to more pay attention to price information and price sensitivity grows much higher, while in case of cohesiveness of the attributes information of quality-attention product category,consumers more pay attention to quality information, so price sensitivity lowers. Specifically, experiment 2 has the experiment design of 2 (price level of product category:low price and attention to quality vs. high price and attention to price) × 2 (cohesiveness: more cohesiveness vs. less cohesiveness) Therefore, alternative explanation says that the results of Ex. 2 may be influenced by a confounding effect - price level and product category.For ruling out this explanation, we used between subjects design of 2 (price level of productcategory: low price and attention to price vs. high price and attention to quality) × 2 (cohesiveness: more cohesiveness vs. less cohesiveness). The experiment design was parsimonious.If cohesiveness effect shows in the product category of low price and price attention, we could prove that cohesiveness effect arises not by product category level but by price level.The result of Experiment 3 revealed that the alternative explanation was erase. Weenhanced the generalizability of Experiment 2.Conclusively, we have shown that the similarity of judgment theory developed by Ritov,Gati, and Tversky(1990) may play an important role in predicting the price sensitivity of consumers with the product information provided by online agents, only in low-priced product category.