The effects of information overload on consumers’ subjective state towards buying decision in the internet shopping environment

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Abstract

One of the strengths of e-retailers is their ability to convey rich information to their customers. The theory of information overload, however, predicts that, beyond a threshold, more information leads to worse quality of, but a better subjective state towards the buying decisions. This study, via re-appraising the conception of decision quality, subjective state towards decision, and threshold of information load, proposes an extended model, considering the roles of information filtering mechanisms, on-line shopping experience, and perceived information overload, to examine the effects of information load on subjective state towards decision. An experiment was conducted to test the research model. The results indicate that rich information leads to a perception of high information overload; and the latter lead consumers to a worse subject state towards decision. Information filtering tools and on-line shopping experience may have influences on relieving but are not the panacea to the phenomenon of information overload. Novice consumers may face a more serious information overload problem.

Introduction

The rates of diffusion and projection about internet shopping are stunning, and its attractive scenarios are worth noting. If consumers feel satisfied with their purchase decisions and shopping experiences, this attractive scenario of internet shopping is highly likely fulfilled. How to enhance the quality of consumer’s on-line shopping decision, and improve their subjective states towards shopping decisions, hence, has attracted some researchers’ attention (Lee and Lee, 2004).

Abundant information plays a critical role in improving consumers shopping decisions (Alba et al., 1997). Previous studies indicated that, in brick-and-mortar settings, more information may lead to better decision (e.g., Russo, 1974, Wilkie, 1974, Malhotra et al., 1982). One of the advantages of the internet retailers is the capacity to convey large amount of information to people in very low cost, which can reduce the cost and effort of searching information, enlarge consideration set, and improve consumers’ welfares (Alba et al., 1997, Evans and Wurster, 1999).

According to the theory of information overload, however, while the information load increases beyond a threshold, consumers might need to take more effort to process the information and may make poorer decision (Jacoby et al., 1974a, Jacoby et al., 1974b). Previous researches stressed for a consensus in the operationalization of information load and decision quality, hoping to find a universal threshold of information load that make decisions worse (Jacoby et al., 1974a, Jacoby et al., 1974b, Russo, 1974, Summers, 1974, Wilkie, 1974, Malhotra et al., 1982, Malhotra, 1982, Keller and Staelin, 1987, Meyer and Johnson, 1989, Hahn et al., 1992, Lee and Lee, 2004, Lurie, 2004).

However, consumers are different with their information processing ability (Henry, 1980); hence, the threshold to overload could be varied from person to person. The same can be said to on-line shopping experience, an internal mechanism for filtering irrelevant information which may vary across individuals (McGuire, 1976). Furthermore, many e-storefronts provide information filtering mechanisms to help consumers abate the burden of product information screening and processing. Effects of the above internal and external information filtering mechanisms, however, are seldom addressed by previous studies.

An understanding of how consumers utilize the information provided by internet retailers would help e-business managers devise marketing strategies regarding the most effective and efficient ways to provide information to their customers (Wu and Lin, 2006, Alba et al., 1997). This study explores the phenomenon of information overload in the internet shopping environment, hoping to know that whether or not, and why the information-richness advantage of e-retailers bring opposite consequences to consumers. The effects of information load and information filtering tools on the decision outcomes of novice and experienced consumers will be examined.

Section snippets

Theory of decision making

The decision theories care about two things: the independent variable – outside information, and the dependent variable – decision quality. At first, perfect information and complete rationality were recognized as the ways to obtain an optimal decision (Edwards, 1954). The school of complete rationality view decision makers as well informed economic men rationally seeking “maximum utility” based on their permanent preference functions (Edwards, 1954, Simon, 1956).

The complexity and limitation

Research model and hypotheses

Our research model is illustrated in Fig. 1. While interacting with customers, the e-tailers, conveying an amount of information richer than that from brick-and-mortar stores, may easily require their customers to bear a burden in processing this information. Richer information may require a higher information processing capacity, which may make it easier for consumers to exceed the limits of his/her capacity, hence producing a stronger perception of overload. Hence, this study proposed:

  • H1: The

Measurement model

The valid samples in groups 1, 2, 3, and 4 were 54, 51, 53, and 46, respectively. A chi-square test revealed that the samples of each group were homogeneous. Since the value of KMO was greater than 0.5 (0.694) and the Bartlett’s test of sphericity was significant (0.000), an exploratory factor analysis (EFA) used principal components analysis with orthogonal rotation by varimax method was conducted. (Table 2) presented the factor structure of the constructs and showed that most of the items

Conclusions and discussions

Based on the theory of information overload, this study examined whether consumers’ subjective states towards their buying decision would be worse while accessing abundant information in an e-store. The effectiveness of external filtering mechanism on alleviating the perception of information overload was also examined. Finally, this study also examined whether these relations would be different between novice and experienced consumers.

There are three main results that may contribute to our

Acknowledgement

This Research is supported by the National Science Council, Executive Yuan, Taiwan, under Grant number NSC 94-2416-H-031-007.

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