Effects of Price Comparison Site on Price and Value Perceptions in Online Purchases

Abstract

This study explores the effect of price comparison sites on the online consumer behavior. Specifically this study examines whether and how price and value perception of online shoppers can be changed when they use a price comparison site. It is found that online consumers perceive relatively higher level of reference price when they are provided with alternatives’ price information by a price-comparison site than when they are not. Contrary to the conventional expectations, price comparison site does not necessarily instigate online shoppers to lower their internal reference prices. These results appear to be contradicted to the conventional idea assuming that the price comparison sites may dampen price competition within the online retail market.