The Influence of Price dispersion on Purchase Intention in Chinese Online C2C Market: a Trust Perspective

Chinese C2C market grows rapidly. However, it is plagued by serious trust fraud problems. The level of price dispersion in C2C platforms is relatively high. The mixed interaction between “lemons market” problem and high level of price dispersion makes it hard for buyers to identify trustworthy sellers with low price. We are interested in the generation of initial trust and purchase intention when the buyers search a product and receive a list of widely distributed prices, rather than a list of narrowly distributed prices. However, limited knowledge can be gained from previous studies regarding this issue. This study puts forward a theoretical model to explain how price dispersion interacts with other important factors in C2C purchase (e.g. initial trust, perceived risk, perceived value and purchase intention). Product type (hightouch/low-touch) is taken into consideration as well since the level of uncertainty faced by buyers is different. A proposal for experiment is described. This research-in-progress has the potential to lead to various theoretical and practical implications. For example, the results will enhance the literature on trust, help buyers do better purchase decision, assist sellers in designing pricing strategy, and be utilized by platforms to propose new mechanisms.