We’ve chosen to set up the Sloan Center for Internet Retailing Web site at the University of California, Riverside, using Wordpress blogging software.  Why?  From 1994 to 2006, we’ve maintained a series of websites for our research centers - Project 2000, eLab, and the Sloan Center for Internet Retailing - at Vanderbilt University.  Tools for implementing these websites ranged from hand-coded html on a Unix server back in 1994, to Frontpage, to Dreamweaver and ColdFusion. 

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Early eLab character art, created by Mike Meredith. Click on each image to view Mike’s original hand sketches.

Mike also designed the Sloan Center’s current shopping cart logo…

All images (c) 2006, Sloan Center for Internet Retailing. Hand sketches copyright Mike Meredith.

The A. Gary Anderson Graduate School of Management at the University of California, Riverside invites applications for up to four full-time tenure-track faculty positions as Assistant Professor in Marketing to begin July 1, 2007. We seek candidates with highly sophisticated research training who can demonstrate the potential for outstanding accomplishment and scholarly distinction in marketing. Research area is open but preference will be given to candidates with strong methodological training and behavioral research interests. Teaching opportunities are available at both the graduate and undergraduate levels.  Candidates must have the Ph.D. or expect the degree to be conferred by the date of appointment. 

File review will begin June 1, 2006. First consideration will be given to candidates who apply by the application deadline of September 1, 2006

Download pdf of full job announcement.

The Sloan Center for Internet Retailing officially moved to the University of California, Riverside on July 1, 2006.   Professors Donna L. Hoffman and Thomas P. Novak, formerly of Vanderbilt University, will co-direct the UCR Sloan Center.  The UCR Sloan Center is supported by a grant from the Alfred P. Sloan Foundation and corporate partners, including founding partners Walmart.com and Lands' End.   (Press release).

Pavlou, Paul A. and Ting Lie, "What Drives Mobile Commerce? A Model of Mobile Commerce Adoption," (2006).

Abstract.  Mobile commerce - the consumer’s engagement in online transactions with sellers using wireless devices - differs from traditional or electronic commerce due to the potential for location-specific real-time transactions and the unique attributes of wireless devices. This paper aims to understand what drives consumers to engage in mobile transactions by viewing m-commerce adoption as a process consisting of three distinct behaviors: (a) ‘getting information’ (b) ‘giving information’, and (c) ‘purchasing’ products using wireless devices. These three inter-related behaviors are first integrated, following the theory of implementation intentions. Second, following the Theory of Planned Behavior (TPB), each behavioral intention is predicted through its attitude, subjective norm, and perceived behavioral control (self-efficacy and controllability). Third, a comprehensive set of salient beliefs for each behavior is elicited and tested by inductively identifying antecedents of the TPB constructs. These salient beliefs include technology acceptance variables (perceived usefulness and perceived ease of use), mobile device characteristics (download delay, screen quality, and device navigability), information characteristics (informativeness and information protection), product characteristics (product value and personalization), and consumer characteristics (monetary resources and consumer skills).

An empirical study with consumers in two countries (United States and Republic of China) supports the proposed m-commerce adoption model. The differences and similarities between these two countries are discussed, and implications for the adoption of m-commerce, TPB, and the IS literature are proposed.  Download pdf.

Dimoka, Angelika and Paul A. Pavlou, "Mitigating Adverse Product and Seller Selection in Online Auction Marketplaces," (2006)

Abstract.  To overcome a market of ‘lemons’, online auction marketplaces must differentiate among products and reward high-quality ones with price premiums. However, the literature has only focused on seller quality uncertainty (seller reputation), alas ignoring the role of product quality uncertainty. It is defined as the degree by which the outcome of a transaction cannot be accurately predicted due to fears that the product’s quality may differ from what is expected. Product quality uncertainty is particularly important in used and expensive experience products, such as used automobiles, whose quality cannot be conveyed via the web interface. To address adverse product selection, this study first introduces a set of product-related variables (warranty, inspection, posted price, standard value, year and mileage) that is proposed to influence price premiums by reducing product quality uncertainty. Moreover, it proposes their interaction effects with seller reputation. The proposed econometric model is tested with a multivariate regression model with secondary data from 350,000 auctions of used cars completed on eBay Motors using a custom data mining tool. Implications for mitigating adverse product selection and preventing a market of ‘lemons’ are discussed.  Download pdf.

Gefen, David and Paul A. Pavlou, "An Inverted-U Theory of Trust:  The Moderating Role of Perceived Regulatoary Effectiveness of Online Marketplaces," (2006).

Abstract.  Past research has widely regarded trust as unconditionally facilitating transaction behavior, and perceived risk as unconditionally detracting from it. This study advocates the necessity to examine trust and perceived risk within the broader perspective of the societal context. We propose the perceived regulatory effectiveness of online marketplaces to moderate the impact of trust on transaction behavior. More specifically, we hypothesize that the degree to which buyer’s trust affects transaction intentions will vary in an inverted U manner depending on the perception buyers have in the regulatory effectiveness of the online marketplace. The impact of trust on transaction intentions will increase as the buyer’s perceived regulatory effectiveness increases from low to medium levels, but it will decrease as the buyer’s perceived effectiveness increases from medium to high levels. Moreover, the perceived regulatory effectiveness of the online marketplace is also hypothesized to reduce the impact of perceived risk on transaction intentions. These moderating effects were examined and empirically supported in the context of eBay’s and Amazon’s online auction marketplaces. Implications for integrating the perceived regulatory effectiveness of online marketplaces into existing trust and risk models are discussed.  Download pdf.

Paton, David, Donald S. Siegel, and Leighton Vaughan Willians, "The Impact of Information Technology on Service Sector Productivity:  Plant-Level Evidence From Gambling Establishments in the United Kingdom," (May 2006) 

Abstract.  There have been numerous studies of the impact of investment in information technology (IT) on manufacturing productivity (e.g., Brynjolfsson and Hitt (1996)) and Morrison (1997)), but little evidence on this relationship in services. We attempt to fill this gap, by analyzing the impact of IT on the relative productivity of gambling establishments. Ours is also the first empirical study of productivity in gambling, one of the fastest growing industries in the service sector. The econometric analysis is based on data from the Annual Respondents Database (ARD) file, consisting of individual establishment records from the U.K. Annual Census of Production. The ARD file contains detailed data on output, materials, energy, employment, and numerous plant and firm characteristics and is quite similar to the U.S.-based Longitudinal Research Database (LRD). Production function models provide an excellent fit to the data, yielding plausible elasticity estimates and indicating constant returns to scale. More importantly, we find that gambling establishments investing more heavily in computers and the Internet are more productive than comparable establishments.  Download pdf.

Hu, Nan, Paul A. Pavlou, and Jennifer Zhang, "Can Online Word-of-Mouth Communication Reveal True Product Quality? Experimental Insights, Econometric Results, and Analytical Modeling," (April 2006).

Online word-of-mouth (WOM) communication in the form of online product reviews, such as those provided by consumers that have previously purchased a product, has become a major information source for consumers and marketers about a product’s quality. The literature has thus used online product reviews to predict a product’s sales and future success, assuming that the average (mean) score of these reviews represents true product quality. However, using experimental and econometric data, this study empirically shows that single point estimation (e.g., the mean) may not be a sufficient predictor of true product quality due to under-reporting by consumers with moderate product reviews.

To overcome this concern, this paper first tests the underlying distribution of online product reviews with secondary data from Amazon (www.amazon.com). The econometric results reveal that the reviews for the majority of the products have an asymmetric bimodal distribution. For these products, the mean of the online product reviews does not necessarily reveal the product’s true quality, resulting in misleading conclusions about the product’s future success. In contrast, results from a controlled experiment where all respondents reviewed a product show that their product reviews follow a unimodal (approximately normal) distribution. This confirms that consumers with extreme (positive or negative) views are more likely to review products than consumers with moderate views, resulting in a truncated sample.

To identify when single point estimation can be used as a sufficient predictor considering the consumers’ incentive of leaving reviews, this paper develops an analytical model to derive the conditions of when the mean can serve as a valid proxy of a product’s true quality. Finally, we introduce a dual point estimation model using the lower and upper ends of the modal interval of the DIP test to predict true product quality, which is shown to be a superior predictor of future product sales versus the simple and weighted average. The paper concludes by discussing the study’s theoretical and managerial implications.  Download pdf.

Pavlou, Paul A. and Angelika Dimoka, "The Nature and Role of Feedback Text Comments in Online Marketplaces: Implications for Trust Building and Price Premiums," (March 2006).

Abstract.  For online marketplaces to succeed and prevent a market of ‘lemons’, their feedback mechanisms (reputation systems) must be able to differentiate among sellers and create price premiums for trustworthy ones (as returns to their superior reputation). However, the literature has solely focused on numerical (positive and negative) feedback ratings, alas ignoring the role of feedback text comments. These text comments are proposed to convey useful reputation information about a seller’s prior transactions that cannot be adequately captured with simple numerical ratings. Specifically, this study examines the content of feedback text comments and their role in engendering buyer’s trust in a seller’s benevolence and credibility. In turn, benevolence and credibility are proposed to influence the price premiums that a reputable seller receives from buyers.

This paper utilizes content analysis to quantify over 10,000 publicly-available feedback text comments of 420 sellers in eBay’s online auction marketplace, and match them with primary data from 420 buyers that recently transacted with these 420 sellers. These dyadic data show that evidence of extraordinary past seller behavior contained in the sellers’ feedback text comments creates price premiums for reputable sellers by engendering buyer’s trust in the sellers’ benevolence and credibility (controlling for the impact of numerical ratings). Interestingly, the addition of benevolence helps explain a higher variance in price premiums (R2=50%) compared to the literature (R2=20-30%). By showing the economic value of feedback text comments through trust in a seller’s benevolence and credibility, this study helps explain the apparent success of online marketplaces that rely on seller differentiation to prevent a market of ‘lemon’ sellers.

The paper discusses the study’s theoretical and practical implications for better understanding the nature and role of feedback text comments, benevolence and credibility, and price premiums in online marketplaces.  Download pdf.