Understanding customers’ purchase behaviour from online group buying websites: a transaction cost approach

This study examined customers’ purchase behaviour from online group buying (OGB) websites. Based on transaction cost approach, a research model was developed from OGB context. Overall, data from 208 OGB customers support the model and the developed relationships. Although price discount has been considered as the strongest driver for customers to purchase from OGB websites, for the first time, this study empirically established it. Moreover, it is found that information asymmetry negatively impacts purchase behaviour; however, the effect of information asymmetry can be reduced by proper signalling method such as disseminating prior customers’ reviews. This study also argued that customization, rather than personalization, is more relevant to transaction costs and OGB. Interestingly, while making a purchase, customers pay less importance to reputation of OGB vendor. The results have been discussed with implications