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Article

Xiaopan Wang, Junpeng Guo, Yi Wu and Na Liu

Information asymmetry is an inevitable issue in e-commerce and largely hampers the development of online shopping. The purpose of this paper is to propose a model to…

Abstract

Purpose

Information asymmetry is an inevitable issue in e-commerce and largely hampers the development of online shopping. The purpose of this paper is to propose a model to investigate the emotional content of online customer reviews, which are considered an efficient way to reduce information asymmetry, as a potential signal of product quality. The moderating effects of perceived empathy and cognitive effort are also explored on the basis of signaling theory.

Design/methodology/approach

A laboratory experiment with 120 subjects was used to empirically test the proposed research hypotheses. The subjects were randomly assigned to two treatment groups, with 60 subjects in each group. ANOVA, linear regression and binary logistic regression were used.

Findings

The emotional content of online customer reviews positively influences perceived product quality, which subsequently and positively affects purchase decisions. The emotional content of online customer reviews greatly influences perceived product quality when perceived empathy or cognitive effort is high.

Originality/value

This study is the first to extend extrinsic cues to emotional content on the basis of signaling theory and reveals the important role of emotional content of reviews. Moreover, the mediating effect of perceived product quality and the moderating effect of perceived empathy and cognitive effort illustrate the mechanism of the influence of emotional content on purchase decision. Findings demonstrate the positive signal of emotional content and provide important practical implications for sellers and customers.

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Article

Weiling Zhuang, Barry Babin, Qian Xiao and Mihaela Paun

The purpose of this paper is to develop and empirically test a new framework that shows how different signals of movie quality along with key control variables affect…

Abstract

Purpose

The purpose of this paper is to develop and empirically test a new framework that shows how different signals of movie quality along with key control variables affect consumers’ post-consumption evaluations, critics’ reviews (CR), and movie box office revenues.

Design/methodology/approach

The data set consists of a sample of 332 movies released between 2000 and 2008. Regression was used to test the study hypotheses.

Findings

The results suggest that the three signals of movie quality exhibit different effects on three movie performance measures. Of the three cues, the peripheral quality signal is positive related to movie box, moviegoers’ evaluations (ME), and CR. Furthermore, star performance quality is positive related to both ME and CR. Surprisingly, overall quality signal does not display any influence on movie performances.

Research limitations/implications

The primary limitation is the use of cross-sectional study design and future research should apply for time-series technique to test the relationships between movie quality signals and movie performances.

Practical implications

The findings suggest that consumers and critics evaluate movie qualities based on various movie quality signals. Furthermore, the characteristics of movies also have mixed impacts on movie performances. Movie studios may take these findings into account to produce better movies.

Originality/value

This study proposes and empirically tests the impacts of three groups of movie signals – peripheral quality signal, star performance quality signal, and overall quality signal on motion picture performance. This study contributes to service quality literature and signal theory by categorizing different Academy Awards into three groups of quality signals and by empirically testing the proposed relationships.

Details

Managing Service Quality, vol. 24 no. 2
Type: Research Article
ISSN: 0960-4529

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Article

Angelina Christie and Daniel Houser

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two…

Abstract

Purpose

The purpose of this paper is to test whether underpricing can serve as a signal of quality in a financing-investment environment and to compare it under the two institutions for financing offers that are commonly observed in corporate financial markets: take-it-or-leave-it offer (TLO) and the competitive bidding offer (CBO).

Design/methodology/approach

The research paper uses experimental economics methodology and laboratory experiments to investigate the research question.

Findings

The results suggest that underpricing can serve as a signal of quality but not sustainable as a repeat strategy. Over time, the high-quality firms converge to a pooling strategy rather than bearing the cost of signaling. Additionally, underpricing is lower under CBO than under TLO institution due to competitive bidding. Signaling under CBO institution may be less salient due to possible mimicking by the low-quality firms.

Originality/value

This paper presents a first experimental investigation of the underpricing-signaling hypothesis in a financing-investment environment under asymmetric information. The choice of institution in a financing environment produces qualitatively and strategically different behavior among firms and investors.

Details

Review of Behavioral Finance, vol. 11 no. 2
Type: Research Article
ISSN: 1940-5979

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Article

Xiang Fang, Bashar S. Gammoh and Kevin E. Voss

While previous research has shown a positive influence of a brand ally or a warranty, published research has not explored the effects of using multiple types of quality

Abstract

Purpose

While previous research has shown a positive influence of a brand ally or a warranty, published research has not explored the effects of using multiple types of quality signals. The purpose of this paper is to explore the joint effect of a default‐independent signal (i.e. a brand ally) combined with a default‐contingent signal (i.e. a warranty) on the focal brand's evaluations.

Design/methodology/approach

This paper reports the findings of a 2 (ally: none vs one) × 2 (warranty: no vs yes) between‐subjects factorial design in which 174 subjects were randomly assigned to experimental conditions.

Findings

The study's findings indicate that, individually, both brand alliance and warranty were a significant signal of product quality. However, the use of multiple types of signals, as opposed to one signal, did not add incrementally to consumer's perceived quality evaluations of a focal brand. In addition, risk reduction mediated the effects of brand ally and/or warranty on the focal brand's evaluations.

Originality/value

Recently, researchers have started to explore the influence of multiple brand alliance signals on consumer evaluations of brand. However, only the same type of signal has been examined. Signaling theory suggests that other marketing mix elements are marketplace signals of quality. This study contributes to the literature by investigating the role of multiple types of quality signals in brand building.

Details

Journal of Product & Brand Management, vol. 22 no. 2
Type: Research Article
ISSN: 1061-0421

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Article

Chien-Ta Ho and Chung-Lun Wei

The purpose of this paper is to propose a framework to examine experiences of an information technology/information systems (IS) outsourcing service supplier as a signal

Abstract

Purpose

The purpose of this paper is to propose a framework to examine experiences of an information technology/information systems (IS) outsourcing service supplier as a signal of perceived service quality and to consider the moderating effects of information asymmetries and signal credibility.

Design/methodology/approach

Drawing on signaling theory, the paper integrates past experiences of an outsourcing service supplier, information asymmetries, signal credibility, perceived service quality, and purchase intention into a model. Questionnaires were collected in Taiwan, and partial least-squares technique was employed to test the model.

Findings

The results indicate that past experiences of an IS outsourcing supplier affect perceived service quality, which subsequently influences positively the intention to purchase IS outsourcing services. In addition, signal credibility moderates the relationship between the provider’s past experiences and perceived service quality, though information asymmetries do not have significant effect on the hypothesized moderating relationship.

Originality/value

This research enriches the extant literatures in signaling theory by demonstrating the few-mentioned IS outsourced suppliers’ experiences as a quality signal as well as in outsourcing contexts with signaling perspectives. The empirical findings validate the importance of dissemination and investment of past experiences for IS provider companies and give a cue of utilizing providers’ experiences to alleviate uncertainty when assessing IS service quality and purchasing outsourcing services for client companies.

Details

Industrial Management & Data Systems, vol. 116 no. 8
Type: Research Article
ISSN: 0263-5577

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Article

Frank Alpert, Beth Wilson and Michael T. Elliott

Examines the phenomenon of price signalling whereby consumer goodsmanufacturers attempt to signal higher quality via a higher price whenobjective product quality is, in…

Abstract

Examines the phenomenon of price signalling whereby consumer goods manufacturers attempt to signal higher quality via a higher price when objective product quality is, in fact, not demonstrably higher. Shows that higher price alone does not succeed in signalling higher quality, but that higher price accompanied by premium‐quality signals in the other elements of the marketing mix does succeed. Concludes that a premium pricing strategy cannot be successful if price is the only marketing variable emphasised and brand managers should think in terms of premium quality positioning that requires the right marketing mix.

Details

Journal of Consumer Marketing, vol. 10 no. 4
Type: Research Article
ISSN: 0736-3761

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Article

Wenbin Ni and Hongyi Sun

This study aims to examine the trustworthiness of internet-based quality signals (specifically webpages and before-sale services) from the perspective of interactivity by…

Abstract

Purpose

This study aims to examine the trustworthiness of internet-based quality signals (specifically webpages and before-sale services) from the perspective of interactivity by evaluating the associations between on-line signals of product quality and the off-line perceived quality of actual products.

Design/methodology/approach

Empirical data are collected from 261 Chinese female university students. Partial least squares structural equation modelling is used to test the conceptual model.

Findings

Both webpages and before-sale services are positively associated with off-line perceived quality, but only the quality of before-sale service has a direct association with customer satisfaction. Webpages and before-sale services are both trustworthy signals for indicating the quality of physical products; however, these signals provide different levels of trustworthiness.

Research limitations/implications

The interactivity perspective supplements information-economics theory in examining the trustworthiness of internet-based signals. A signal is a trustworthy indicator only if customers perceive a close relationship between the quality of the signal and the actual product quality.

Practical implications

On-line sellers should improve the reciprocity and controllability of communications from a buyer’s perspective and should pay more attention to the strategic role of on-line communication for improving customer service.

Originality/value

Researchers have evaluated the trustworthiness of on-line quality signals from an information-economics perspective. This study extends these previous studies by addressing the perspective of interactivity. Two types of product-quality signals, including webpages and before-sale services, are assessed in terms of their trustworthiness by examining how these signals relate to off-line perceived quality and customer satisfaction.

Details

Journal of Services Marketing, vol. 32 no. 2
Type: Research Article
ISSN: 0887-6045

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Article

Frank Alpert, Beth Wilson and Michael T. Elliott

Examines the phenomenon of “price signalling”, wherebyconsumer goods manufacturers attempt to signal higher quality via ahigher price when objective product quality is, in…

Abstract

Examines the phenomenon of “price signalling”, whereby consumer goods manufacturers attempt to signal higher quality via a higher price when objective product quality is, in fact, not demonstrably superior. A study of two similar facial moisturizers showed that higher price alone did not succeed in signalling higher quality, but that higher price accompanied by premium‐quality signals in the other elements of the marketing mix (advertising, packaging, in‐store location) does succeed. To put it more generally, a “premium pricing strategy” cannot be successful if price is the only marketing variable emphasized. Brand managers should therefore think in terms of a “premium quality positioning” that requires the application of quality cues across the marketing mix.

Details

Journal of Product & Brand Management, vol. 2 no. 1
Type: Research Article
ISSN: 1061-0421

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Article

Tho D. Nguyen

Although it is well known that firms can use signals to inform consumers about the unobservable aspect of their products or services in a market where asymmetric…

Abstract

Purpose

Although it is well known that firms can use signals to inform consumers about the unobservable aspect of their products or services in a market where asymmetric information exists, research on the relationship between signal quality and service quality is largely ignored. The purpose of this study is to investigate the role of signal quality in the quality of Master of Business Administration (MBA) education in Vietnam.

Design/methodology/approach

A sample of 457 MBA students in both local and international MBA programs in Ho Chi Minh, Vietnam, was used to test a model that incorporates the relationships between signal quality, program investments, perceived quality, and program loyalty by means of structural equation modeling.

Findings

The results of this study indicate that signal quality has a positive impact on program quality. In addition, program investments affect both the signal quality and program quality, and program quality underlies program loyalty. Finally, no significant difference is found between local and international programs.

Research limitations/implications

A major limitation of this study is the investigation of only one education service, i.e. MBA education. An extension to other types of education as well as other services would enhance the generalizability of the results.

Practical implications

The results of this study suggest that MBA programs, local as well as international, should send clear, consistent, and credible signals to their students in order to position their brands in the market where information asymmetry exists.

Originality/value

A major contribution of this study is the use of signaling theory to examine the relationship between signal quality and service quality.

Details

Quality Assurance in Education, vol. 17 no. 4
Type: Research Article
ISSN: 0968-4883

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Article

Nguyen Dinh Tho

Realizing the role of signals in the evaluation of teaching quality as well as the advantage of a set-theoretic approach to education research, the purpose of this paper…

Abstract

Purpose

Realizing the role of signals in the evaluation of teaching quality as well as the advantage of a set-theoretic approach to education research, the purpose of this paper is to employ a signaling framework and fuzzy-set qualitative comparative analysis (fsQCA) to configure the roles of signal quality, including signal consistency, signal clarity, signal credibility and teaching investment in the teaching quality of Master of Business Administration (MBA) faculty members.

Design/methodology/approach

A sample of 342 MBA students in Ho Chi Minh City, Vietnam was surveyed to collect the data. fsQCA was employed to configure the conditions – signal consistency, signal clarity, signal credibility and teaching investment – for the occurrence of teaching quality, and structural equation modeling (SEM) was used to test the net effects of these conditions on teaching quality.

Findings

fsQCA findings reveal that teaching investment combines with signal clarity, signal consistency and signal credibility to form sufficient conditions for the occurrence of teaching quality. SEM results confirm the net effects of these conditions on teaching quality.

Practical implications

This study suggests that MBA faculty members should invest in their teaching and send clear, consistent and credible signals to their students in order to enhance their teaching quality perceived by their students.

Originality/value

The application of signaling theory to evaluate teaching quality, which has largely been ignored in prior research, and the use of fsQCA to better understand the complexity of necessary and sufficient conditions for teaching quality are two contributions of this study to the literature.

Details

Education + Training, vol. 59 no. 3
Type: Research Article
ISSN: 0040-0912

Keywords

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