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Introduction
In recent years, the number of online shoppers has increased exponentially across most global markets. Research on perceived value sought by the online shopper is on the rise, as most consumer purchases are driven by this construct (Cronin et al., 2000; Grewal et al., 2003; Zeithaml, 1988). While extant research in this area tries to identify variables that drive perceived value in the purchase of new goods online (Kim and Gupta, 2009; Gupta and Kim, 2010; Audrain-Pontevia et al., 2013), the Internet also serves as a significant channel that facilitates the exchange of used or second-hand goods.
Online auctions, second-hand goods retail websites and online classifieds websites also serve as important intermediaries for redistributing used goods (Cameron and Galloway, 2005). Such intermediaries enable the reduction of excessive waste caused by over-consumption in society (Brosius et al., 2013). Online second-hand markets are also an important part of the growing “sharing economy” that is fuelled by the growth in information technology (Hamari et al., 2016). The second-hand market is experiencing rapid growth worldwide (Lee and Stewart, 2016; Lockett, 2016; Durif et al., 2017). Hence, it is important to investigate perceived value in the context of online second-hand markets too.
This study draws from Thaler’s mental accounting model (Thaler, 1985) to address this gap by examining the variations in perceived value in both new and second-hand purchases on the Internet. Zeithaml (1988) defines perceived value as “the difference between the benefits obtained and the sacrifices made to acquire a product”; we follow this definition. Thaler’s mental accounting model describes this trade-off aspect of perceived value by using the components of “acquisition value” and “transaction value”. Online transactions suffer from a number of uncertainties. Perceived uncertainty is an important characteristic of online transactions and refers to the “difficulty in predicting the outcome of an online transaction due to seller-related and product related information asymmetry” (Dimoka et al., 2012). As acquisition value is an important determinant of consumer choice when compared to transaction value when quality is uncertain (Urbany et al., 1997), this study examines acquisition value rather than transaction value.
E-tailers are also interested in the effect of perceived value on loyalty as repeat purchases improve the margin (Sirdeshmukh et al.