The Moderating Effects of Product Involvement on Escalation Behavior

ABSTRACT Prior research on escalation in online auctions neglects the role of product involvement, despite the importance of involvement in shaping purchasing decisions. In this study, we develop and test a research model in which product involvement moderates the effects of two key escalation drivers—sunk cost and completion—on an individual’s online bidding behavior. Results indicate that when product involvement is high, completion drives escalation behavior, but when product involvement is low, sunk cost drives escalation behavior. Consistent with prior work, the interaction of sunk cost and completion was a significant predictor of willingness to continue bidding.

[1]  Joel Brockner,et al.  Factors affecting withdrawal from an escalating conflict: Quitting before it's too late , 1979 .

[2]  A. Tversky,et al.  Prospect theory: analysis of decision under risk , 1979 .

[3]  A. Teger,et al.  Too Much Invested to Quit , 1980 .

[4]  C. Fornell,et al.  Evaluating structural equation models with unobservable variables and measurement error. , 1981 .

[5]  Subhash Sharma,et al.  Identification and Analysis of Moderator Variables , 1981 .

[6]  A. Tversky,et al.  The framing of decisions and the psychology of choice. , 1981, Science.

[7]  Joel Brockner,et al.  Face-Saving and Entrapment , 1981 .

[8]  J. Cacioppo,et al.  Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement , 1983 .

[9]  G. Laurent,et al.  Measuring Consumer Involvement Profiles , 1985 .

[10]  J. Zaichkowsky.  Measuring the Involvement Construct , 1985 .

[11]  H. Arkes,et al.  The Psychology of Sunk Cost , 1985 .

[12]  Glen Whyte,et al.  Escalating Commitment to a Course of Action: A Reinterpretation , 1986 .

[13]  Peter H. Bloch,et al.  After the New Wears Off: The Temporal Context of Product Involvement , 1986 .

[14]  Richard L. Celsi,et al.  The Role of Involvement in Attention and Comprehension Processes , 1988 .

[15]  A. C. Rogers,et al.  De-escalation of commitment in oil exploration : when sunk costs and negative feedback coincide , 1990 .

[16]  H. Garland.  Throwing Good Money After Bad: The Effect of Sunk Costs on the Decision to Escalate Commitment to an Ongoing Project , 1990 .

[17]  Stanley Heshka,et al.  The analysis and identification of homologizer/moderator variables when the moderator is continuous: An illustration with anthropometric data , 1992, American journal of human biology : the official journal of the Human Biology Council.

[18]  J. Brockner.  The Escalation of Commitment to a Failing Course of Action: Toward Theoretical Progress , 1992 .

[19]  Donald E. Conlon,et al.  The Role of Project Completion Information in Resource Allocation Decisions , 1993 .

[20]  R. Perloff.  The Dynamics of Persuasion: Communication and Attitudes in the 21st Century , 1993 .

[21]  Richard G. Netemeyer,et al.  Handbook of Marketing Scales: Multi-Item Measures for Marketing and Consumer Behavior Research , 1993 .

[22]  M. Keil,et al.  The effects of sunk cost and project completion on information technology project escalation , 1995 .

[23]  M. E. Gordon,et al.  Relationship marketing effectiveness: The role of involvement , 1998 .

[24]  Donald E. Conlon,et al.  Too Close to Quit: The Role of Project Completion in Maintaining Commitment1 , 1998 .

[25]  Bernard C. Y. Tan,et al.  A Cross-Cultural Study on Escalation of Commitment Behavior in Software Projects , 2000, MIS Q..

[26]  Boehne,et al.  Deciding Whether to Complete or Terminate an Unfinished Project: A Strong Test of the Project Completion Hypothesis. , 2000, Organizational behavior and human decision processes.

[27]  Ronald T. Wilcox.  Experts and Amateurs: The Role of Experience in Internet Auctions , 2000 .

[28]  Henry Moon,et al.  Looking forward and looking back: integrating completion and sunk-cost effects within an escalation-of-commitment progress decision. , 2001, The Journal of applied psychology.

[29]  J. Keith Murnighan,et al.  A Very Extreme Case of the Dollar Auction , 2002 .

[30]  Hwiman Chung,et al.  Humour effect on memory and attitude: moderating role of product involvement , 2003 .

[31]  Traci Carte,et al.  In Pursuit of Moderation: Nine Common Errors and Their Solutions , 2003, MIS Q..

[32]  D. Ariely,et al.  Buying, Bidding, Playing, or Competing? Value Assessment and Decision Dynamics in Online Auctions , 2003 .

[33]  P. Quester,et al.  Product involvement/brand loyalty: is there a link? , 2003 .

[34]  Wynne W. Chin,et al.  A Partial Least Squares Latent Variable Modeling Approach for Measuring Interaction Effects: Results from a Monte Carlo Simulation Study and an Electronic - Mail Emotion/Adoption Study , 2003, Inf. Syst. Res..

[35]  Scott B. MacKenzie,et al.  Common method biases in behavioral research: a critical review of the literature and recommended remedies. , 2003, The Journal of applied psychology.

[36]  DeGross.  Errata Notes: User Heterogeneity and Its Impact on Electronic Auction Market Design: An Empirical Exploration , 2004 .

[37]  GoesPaulo,et al.  User heterogeneity and its impact on electronic auction market design , 2004 .

[38]  Detmar W. Straub,et al.  A Practical Guide To Factorial Validity Using PLS-Graph: Tutorial And Annotated Example , 2005, Commun. Assoc. Inf. Syst..

[39]  D. Malhotra,et al.  Towards a competitive arousal model of decision-making: A study of auction fever in live and Internet auctions , 2005 .

[40]  Jung-Chae Suh,et al.  WHEN BRAND ATTITUDES AFFECT THE CUSTOMER SATISFACTION-LOYALTY RELATION: THE MODERATING ROLE OF PRODUCT INVOLVEMENT , 2006 .

[41]  J. J. Po-An Hsieh,et al.  ScholarWorks @ Georgia State University , 2016 .

[42]  C. Farn,et al.  Investigating Initial Trust Toward E-tailers from the Elaboration Likelihood Model Perspective , 2006 .

[43]  A. Tversky,et al.  Prospect theory: an analysis of decision under risk — Source link , 2007 .

[44]  Qing Hu,et al.  Assimilation of Enterprise Systems: The Effect of Institutional Pressures and the Mediating Role of Top Management , 2007, MIS Q..

[45]  Gillian Ku,et al.  Learning to de-escalate: The effects of regret in escalation of commitment , 2008 .

[46]  M. Keil.  UNDERSTANDING OVERBIDDING BEHAVIOR IN C2C AUCTIONS: AN ESCALATION THEORY PERSPECTIVE. , 2010 .

[47]  D. Malhotra.  The desire to win: The effects of competitive arousal on motivation and behavior , 2010 .

[48]  Yi-Fen Chen,et al.  Effect of Herd Cues and Product Involvement on Bidder Online Choices , 2010, Cyberpsychology Behav. Soc. Netw..

[49]  Sang Cheol Park,et al.  Consumer perceptions on web advertisements and motivation factors to purchase in the online shopping , 2010, Comput. Hum. Behav..

[50]  Joel Brockner,et al.  Entrapment in Escalating Conflicts: A Social Psychological Analysis , 2011 .

[51]  Stephen E. Humphrey,et al.  The Consequences of Completion: How Level of Completion Influences Information Concealment by Decision Makers , 2011 .

[52]  Sengun Yeniyurt,et al.  TO BID OR NOT TO BID: DRIVERS OF BIDDING BEHAVIOR IN ELECTRONIC REVERSE AUCTIONS , 2011 .

[53]  Christof Weinhardt,et al.  Excitement Up! Price Down! Measuring Emotions in Dutch Auctions , 2012, Int. J. Electron. Commer..

[54]  Thinking or Feeling the Risk in Online Auctions: The Effects of Priming Auction Outcomes and the Dual System on Risk Perception and Amount Bid , 2012 .

[55]  Dustin J. Sleesman,et al.  CLEANING UP THE BIG MUDDY: A META-ANALYTIC REVIEW OF THE DETERMINANTS OF ESCALATION OF COMMITMENT , 2012 .

[56]  Khawaja Asjad Saeed,et al.  The Role of Uncertainty Stemming from Product Monetary Value in Online Auctions: The Case of Search Goods , 2014, Int. J. Electron. Commer..

[57]  Mark Keil,et al.  Winner's regret in online C2C Auctions: an automatic thinking perspective , 2016, Inf. Syst. J..

[58]  Achita Muthitcharoen,et al.  The Role of Auction Duration in Bidder Strategies and Auction Prices , 2017, Int. J. Electron. Commer..