Yongfu He, Harmen Oppewal, Yuho Chung and Ling Peng
This paper aims to study how price and sales level information influence consumer product perceptions and choices in online settings. It, in particular, tests whether displaying…
Abstract
Purpose
This paper aims to study how price and sales level information influence consumer product perceptions and choices in online settings. It, in particular, tests whether displaying sales level information increases consumer price sensitivity, which is a potential strategic risk to retailers.
Design/methodology/approach
Study 1 uses eBay data to investigate whether the interaction effects between price and sales level can be observed in an existing market. Study 2 involves online experiments across three product categories. Participants choose from product pairs that are shown with either the same or different prices and with no, the same or different sales levels.
Findings
Study 1 shows strong effects of a product’s displayed sales and price level on its daily sales but finds no interaction effect. Study 2 shows strong effects of price and sales levels on product choice but similarly finds no evidence that sales level information influences consumer price sensitivity, although it reveals an effect on quality perceptions. The results show how perceptions of quality, sacrifice and popularity mediate the effects of price and sales level information on product choice.
Research limitations/implications
Study 1 has limited control over prices and sales levels. Study 2 involves only hypothetical choices.
Practical implications
These findings indicate that businesses can use sales level information to manage consumer product quality perceptions and choices without having to be concerned that this will make consumers more price-sensitive.
Originality/value
To the best of the authors’ knowledge, this paper is the first to investigate how sales level information affects consumer responses to price differences in online contexts.
Details
Keywords
Yu-Ho Chi and David A. Ziebart
The purpose of this study is to examine the impact of auditor type on management’s choice of forecast precision and management forecast errors, including the effects of corporate…
Abstract
Purpose
The purpose of this study is to examine the impact of auditor type on management’s choice of forecast precision and management forecast errors, including the effects of corporate governance. The authors use a different sample and a larger period of years to determine whether prior inferences are robust across these dimensions as well as various corporate governance and other control variables.
Design/methodology/approach
This quasi-experimental study uses archival data in regression-based analyses.
Findings
The authors find firms with Big 5 auditors issue forecasts that have larger forecast errors are biased downward and are less precise. The inferences of this study are robust to the inclusion of corporate governance variables, along with an extensive number of control variables found important in prior studies.
Research limitations/implications
While the sample and time period may be limited, the authors have no evidence this biases the results.
Practical implications
More stringent auditing may have an unintended consequence of reducing the informativeness of management forecasts, as managers act strategically in regards to forecast accuracy, bias and precision.
Social implications
The inferences of this study indicate that while higher quality audits could constrain earnings management, higher quality audits may induce management to provide forecasts that have greater errors, may be biased and may be less informative.
Originality/value
The results and inferences of this study suggest that the inferences in prior studies hold across a different sample and a different time period. This is important given concerns in the academic community regarding the extent to which prior studies can be replicated.