Price Transparency and Purchase Intention in The Context of Online Shopping

Electronic market provides more price transparency than conventional market due to its lower search cost, easier access to price information. However, after examining previous work, empirical research on the effect of price transparency on online consumer's purchase behavior is extremely rare. Based on the stimulus- organism-response model and equity theory, we develop a theoretical model. Specifically, we investigate the impact of price transparency of lower price on purchase intention through perceived website diagnosticity and perceived price unfairness. In addition, we also examine the moderating impact of explanation facilities as a website design feature on the relationship between price transparency and perceived price unfairness. An experimental study is designed to test the hypothesized model.