How Price Dispersion Influences Intention to Join Online Group Buying: The Role of Perceived Price Fairness

Base on transaction utility theory and equity theory, this study examines the effect of price dispersion on consumers’ intention to join the online group buying. The mediating effect of consumers’ perceived price fairness is considered. Our results reveal several important findings. Firstly, the wider the price dispersion is, the lower the consumers’ perceived price fairness is. Secondly, higher the consumers’ perceived price fairness contributes to higher the consumers’ transaction utility. Thirdly, the consumers’ transaction utility is positively related to consumers’ intention to participate in the online group buying. Counter intuitively, price dispersion doesn’t have direct effect on consumers’ transaction utility, but through consumers’ perceived price fairness as a mediator. The implications for researchers and practitioners are explored and recommendations for future research are made.