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Online shopper engagement in price

negotiation: the roles of culture,
involvement and eWOM
Shalom Levy & Yaniv Gvili

To cite this article: Shalom Levy & Yaniv Gvili (2019): Online shopper engagement in price
negotiation: the roles of culture, involvement and eWOM, International Journal of Advertising, DOI:
10.1080/02650487.2019.1612621
To link to this article: https://doi.org/10.1080/02650487.2019.1612621

Published online: 10 May 2019.

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INTERNATIONAL JOURNAL OF ADVERTISING
https://doi.org/10.1080/02650487.2019.161262

Online shopper engagement in price negotiation: the roles of

culture, involvement and eWOM
Shalom Levya and Yaniv Gvilib
a b
Department of Economics and Business Administration, Ariel University, Ariel, Israel; School of
Business Administration, Ono Academic College (OAC), Kiryat Ono, Israel

ABSTRACT
The strategy of inviting online shoppers to negotiate product prices ARTICLE HISTORY
has been employed by numerous online sellers due to its benefits for Received 15 August 2018
buyers and sellers. Social media facilitates sharing information Accepted 17 April 2019
regarding such economic benefits among shoppers, thereby KEYWORDS
generating eWOM, which boosts online social commerce. Yet not all Online shopping; engagement;
buyers choose to embrace sellers’ offers to negotiate product price. eWOM;
In the current paper, we employ consumer culture theory and the negotiation; involvement;
elaboration likelihood model to theorize the effects of culture and collectivism
involvement on consumer engagement in price negotiation. Two
studies were designed to test the proposed conceptual framework.
Based on eBay transaction data (N ¼ 498), Study 1 supported the
hypothesized positive main effects of collectivism and involvement
on shoppers’ engagement in price negotiation. Study 2
demonstrated, in a controlled laboratory setting (N ¼ 468), the
moderating effect of eWOM on these relationships. When other
buyers shared information regarding price negotiation, the positive
effect of collectivism on negotiation was mitigated, and the effect of
involvement was strengthened. These findings have significant
theoretical, practical, and social implications.

Introduction
In efforts to promote their business, online sellers often offer prospective buyers
opportunities to engage in price negotiation (Sharma and Krishnan 2001). In 2016, when
Facebook relaunched Marketplace, a new social e-commerce platform, it encouraged
would-be buyers to contact sellers and engage in real-time price negotiation using
Messenger (Facebook 2018). Consumer Reports praised Marketplace and its sellers for
welcoming online shoppers to counter offers because its commercial data suggest that
haggling adds value to both buyers and sellers and boosts sales (Bufete 2016; 2017). eBay
sellers attract buyers by inviting them to engage in price negotiation as a strategy to drive
sales (Rampen 2016). As a result, in 58% of all eBay sales, buyers are allowed to negotiate
the product’s price (Hasker and Sickles 2010).
2 S. LEVY AND Y. GVILI
CONTACT Yaniv Gvili ygvili@ono.ac.il School of Business Administration, Ono Academic College (OAC), 104 Zahal
St., Kiryat Ono 55000, Israel.
2019 Advertising Association
Welcoming customer engagement in bargaining has also become common practice for
traditional retailers (Stout 2013), as customers have become more informed,
interconnected with each other and increasingly aware of their negotiating clout (Prahalad
and Ramaswamy 2004).
Consumer engagement in price negotiation may be invigorated by the emerging practice
of consumer price posting, where people share their purchase price information on social
media. Using social apps and networked technology, customers learn about the prices paid
by others and share their own engagement experience (Lariviere et al. 2013). Based on such
posts, consumers can engage more effectively in informed price negotiation (Zhang and
Jiang 2014).
Online customer engagement in price negotiation may be mutually beneficial to both
buyers and sellers because it enhances the shopping experience (Moon et al. 2013) and
communicates to shoppers that sellers seek to engage in constructive dialogues (Colliander,
Dahlen, and Modig 2015), reinforcing buyer–seller relationships (Chan, Cheng, and Hsu
2007; Rappaport 2010). In addition, inviting shoppers to negotiate price increases
customers’ perceived value of the seller’s offering (Holmes et al. 2017).
Despite its promising benefits, not all buyers and sellers find price negotiation equally
appealing (Denegri-Knott and Molesworth 2010; Standifird, Roelofs, and Durham 2005).
Some buyers prefer to eliminate haggling by using digital apps, due to the anxiety they
attribute to the negotiation process (Boudette 2017). Experienced Airbnb hosts were also
reported to disapprove haggling so extremely that they would not book haggling guests
even at full price (Porges 2016).
Building on consumer culture theory (CCT) and the elaboration likelihood model (ELM),
we propose that two key factors explain the differences in online shoppers’ propensity to
engage in price negotiation: collectivism-individualism, and involvement. Furthermore, we
argue that exposure to eWOM regarding others’ negotiations with sellers moderates these
effects. Two studies were designed to test these theory-based arguments. Study 1 uses data
collected from transactions conducted on eBay to test the main effects of culture and
involvement on engagement in price negotiation. Study 2 tests the hypothesized
moderation effect of eWOM in a controlled laboratory experiment.
This paper contributes to the body of literature on online consumer engagement by
investigating the antecedents of a particular consumer activity within this domain –
negotiating with online sellers. It also adds to the literature of social commerce marketing
by demonstrating the interaction effects of eWOM with cultural factors and involvement on
consumer acceptance of marketers’ invitation to negotiate prices.

Literature review
Price negotiation is a growing phenomenon in online and offline shopping processes where
seller-buyer interactions take place (Bauer, Falk, and Hammerschmidt 2006; Fang 2006;
Sun, Ni, and Wang 2016). Negotiation is defined as an interaction between two or more
parties to determine the terms of exchange (Mintu-Wimsatt and Calantone 1996). During
 INTERNATIONAL JOURNAL OF ADVERTISING 3
negotiations, both parties attempt to maximize their benefits from the transaction (Brett
2007; Gillison, Northington, and Beatty 2014; Zeng, Dasgupta, and Weinberg 2012). The
stronger one’s tendency to negotiate, the stronger one’s competitiveness during this
process (Graham, Mintu, and Rodgers 1994; Lee 2000). Potentially, consumers may benefit
from negotiating product prices by counteroffering while shopping. Yet, not all consumers
choose to negotiate (De Kervenoael, Hallsworth, and Elms 2014). Research suggests that
cultural factors may be the underlying explanation for this divide (Ackerman and Tellis
2001).

The effect of culture on shopping behavior

Although the Internet and the worldwide popularity of its business and social applications
have bridged geographic distances between buyers and sellers, it has not erased the fact
that online shopping is a global phenomenon that involves interactions between buyers and
sellers from different regions, nationalities, and cultures. From marketing communications’
perspective, the Web facilitates communications involving diverse audiences, allowing
sellers to attract buyers from various parts of the world. Consequently, more online sellers
endeavor to interact and transact with foreign buyers. The Alibaba Group, for example, has
adopted a global market strategy to promote the company’s business across the globe
(Lashinsky 2017), and Amazon has announced that its annual special Prime Day shopping
event will be promoted in more international markets than ever, including many European
countries, India, and China (Vanian 2018; Weinswig 2017). Consequently, an increasing
proportion of online shopper-seller interactions take place across cultures.
Culture is “a collective programming of the mind which distinguishes the members of
one group or category of people from those of another” (Hofstede 1991, p.5). Culture has
been traditionally conceptualized at the national level (Hofstede 2001) and was later
extended to the individual level (Yoo and Donthu 2005). National culture refers to ‘the
characteristics that create a [national] society’s profile, inclusive of norms, values, and
institutions’ (Griffith, Yalcinkaya, and Rubera 2014, p.6). That is, values and norms often
vary across national societies. Nonetheless, similar cultural values were found at the
individual level across countries and nationalities (Minkov and Hofstede 2011; Taras,
Kirkman, and Steel 2010; Yoo and Donthu 2005).
Cultural differences act as a major driver of consumer behaviour diversity (Hong,
Muderrisoglu, and Zinkhan 1987; Moon, Chadee, and Tikoo 2008; Pergelova and Angulo-
Ruiz 2017). Consumers from different cultures respond dissimilarly to identical marketing
stimuli (De Mooij and Hofstede 2010; Tsai and Men 2017), which requires marketers to
adjust their marketing communications to the cultural nuances of their target audiences
(Davis, Wang, and Lindridge 2008; Grau and Zotos 2016).
Research suggests that shopping behaviour is contingent on shoppers’ culture (Ackerman
and Tellis 2001). The approach of consumer culture theory (CCT) provides a theoretical
explanation for this effect (Arnould and Thompson 2005; Holt 1997). CCT conceptualizes
culture as the foundation of a consumer’s experiences, interpreted meanings, and actions
(Geertz 2008). Culture frames consumers’ scope of conceivable action, emotions, and
thought, making patterns of behaviour more likely than others (Askegaard and Kjeldgaard
4 S. LEVY AND Y. GVILI
2002; Holt 1997; Thompson and Hirschman 1995). CCT suggests that consumer culture
furthermore affects shopping behaviours differently across social spaces and contexts (e.g.
offline shopping, digital markets, social network site). We subscribe to this point of view and
accordingly posit that consumer intentions to engage in price negotiation – a particular
aspect of shopping behaviour – are influenced by the individual’s cultural orientation.

Culture and price negotiation

Past research has shown that people’s general tendency to negotiate is influenced by their
values, which are rooted in their national cultures (Buchan, Croson, and Johnson 2004;
Chuah, Hoffmann, and Larner 2014). More specifically, cultural factors may affect
consumers’ tendency to engage in price negotiation (Lee 2000; Nyer and
Gopinath 2002).
In his seminal work, Hofstede (2001) identified major cultural characteristics that
differentiate between societies. One of the main characteristics identified by Hofstede is
individualism vs. collectivism, which is defined as ‘people looking after themselves and their
immediate family only, versus people belonging to in-groups that look after them in
exchange for loyalty’ (De Mooij and Hofstede 2010, p. 88). People from individualistic
societies value personal welfare, autonomy, independence and individual decisions. As a
result, when making purchase decisions, they prefer self-interest and tend to rely on
themselves, their own efforts (Griffith, Yalcinkaya, and Rubera 2014), and their internally
owned information rather than seek advice from their social contacts.
On the other hand, people from collectivistic societies value social belonging,
interdependency, and group decisions. Highly collectivistic shoppers have a social obligation
to share consumption experiences with in-group others (Pizam and Jeong 1996), which
enhances in-group social interaction and collaborative behaviours (Cai, Wilson, and Drake
2000).
The literature on individualism-collectivism suggests that collectivists tend to engage in
competitive relationships with out-group individuals (Triandis 1990). Accordingly, their
relationships with out-group online sellers will be competitive in nature. Research suggests
that collectivist people tend to have less trust in out-group others (Huff and Kelley 2005;
Watkins and Liu 1996), and that their trust radius is usually narrower than individualists
(Van Hoorn 2015). Marketing research shows that the overall lower trust collectivists assign
to out-group sellers further hurts their perception of product price fairness (Bolton, Keh,
and Alba 2010). Therefore, collectivists are more likely to engage in price negotiation than
individualists as they are more sensitive to price fairness.
In addition, experiencing shame evoked by "face" concerns may also increase the
collectivist shopper tendency to engage in price negotiation (Chuah, Hoffmann, and Larner
2014). Collectivist consumers experience more shame when paying a higher (vs. lower)
price than a friend because of a perceived loss of social status resulting from ill treatment
by others (Bolton, Keh, and Alba 2010). Consequently, collectivist shoppers will be more
inclined than individualistic shoppers to engage in competitive price negotiation (Lee 2000).
Hence, we propose the following hypothesis:
 INTERNATIONAL JOURNAL OF ADVERTISING 5
H1: Online shoppers from more collectivistic cultures will show a higher tendency to engage online
in price negotiation than shoppers from individualistic cultures.

The effect of involvement on price negotiation

Consumer involvement is a key factor that drives online interaction in general (Voorveld,
Neijens, and Smit 2009) and specifically interactions in online shopping contexts (Han and
Kim 2017). Involvement refers to a person’s perceived relevance of an object, topic, or
purchase process to her own needs, values, and interests (Mittal and Lee 1989; Zaichkowsky
1985). Involvement varies across domains, has multiple antecedents, and different
consequences for consumer behaviour (Laurent and
Kapferer 1985).
We predict that shopper propensity to negotiate price is positively associated with
involvement in the transaction, for several reasons. First, involvement is positively related
to bidding behaviour on auction sites (Stafford and Stern 2002). Although online bidding
and price negotiation are distinct behaviours, they are similar in the sense that they entail
shoppers’ online interaction with sellers aimed to lower purchasing price. Second,
consumers’ primary motivation to negotiate a product price is to gain better value (Sharma
and Krishnan 2001). Under low involvement conditions, purchase importance and its overall
expected value are lower. Because negotiating with sellers involves costs of time and effort,
shoppers’ willingness to engage in such a behaviour is more likely to take place when its
potential benefits are more significant: that is, in high involvement contexts, when the
transaction is more meaningful to the buyer. Hence, the following hypothesis:
H2: Online shoppers’ tendency to engage online in price negotiation will be positively related to
their involvement in the buying process.

Study 1
Methodology
Data collection and Sample: Transaction records of experienced eBay sellers were chosen
for the current study’s sample. eBay was chosen because of its innovative system that
provides historical records of seller-buyer interactions. Among e-commerce websites, eBay
presents the highest number of social commerce features (Curty and Zhang 2013). The
sampling frame was the overall annual transactions recorded by a global eBay dealer who
granted us access to account information for the purpose of this study. A random sample of
498 transactions was sampled from approximately 15,000 transactions, such that it would
equally contain transactions of buyers located in the United States and Russia. Transactions
were diverse and included products such as perfumes, toys, and clothing. Product price
range was GBP 3.20–74.70 (M ¼ 12.93, SD ¼ 10.91), with no difference between United
States and Russia (MUS ¼ 12.70,

SDUS ¼ 10.72, MRussia ¼ 13.16, SDRussia ¼ 11.11; t ¼ .48, p > .10).

6 S. LEVY AND Y. GVILI
Measurement procedure: Of the two sampled nationalities, Americans consistently score
higher than Russians on Hofstede’s individualism/collectivism index; for Americans
Hofstede’s index is 91, and for Russians the index is 39 (Hofstede Center 2018; Hofstede,
Hofstede, and Minkov 2010). Following recent marketing research (Amatulli et al. 2017),
this procedure operationalized the national culture variable; coding was 1 for Americans
and 2 for Russians. Additional measures were collected from eBay dealer’s account and
were coded as follows. Transaction involvement was measured directly by focusing on the
behavioural aspects of involvement, which includes information search and transaction-
related activities during the buying process (Lichtenstein, Netemeyer, and Burton 1995). In
digital contexts, involvement is typically measured by time spent, efforts undertaken
(Hemetsberger 2003; Wu, Scott, and Yang 2013), and the extent of dependency between
people’s actions (Ekman et al. 2012). Accordingly, in this study, involvement was measured
by the number of shoppers’ reminder notes to sellers during the transaction process. The
validity of this construct measurement was supported by correlating it with another
transaction-related activity – buyer feedback (r ¼ .20, p < .01). A dichotomized measure was
coded 1 for high involvement – for those who sent sellers reminder notes, and 0 otherwise.
The dependent variable, tendency to engage online in price negotiation, was measured by
shoppers’ actual negotiation behaviour, where 1 indicates shoppers’ price counteroffering
and 0 otherwise.
We controlled for variables suggested by research as potentially confounding with
consumers’ price negotiation, such as product price (Bolton, Warlop, and Alba 2003;
Carlson, Huppertz, and Neidermeyer 2008; Sharma and Krishnan 2001) and customer’s
experience with the shopping site (Barrutia and Espinosa 2014; Dai, Forsythe, and Kwon
2014; Hernandez, Jimenez, and Martın 2010). Price was measured by the transaction price
in GBP. Shopper’s overall experience was measured by assessing two aspects: shoppers’
activity level and their experience with eBay. Shopper’s activity level was denoted by eBay
stars, which indicate buying frequency. This was coded as highly active for shoppers with
more than 300 stars, and less active otherwise. Shopper’s experience was coded as low for
shoppers that joined eBay in the last three years, and high otherwise. Categorizing these
variables was based on interviews conducted with three eBay expert dealers.

Results
First, Spearman’s nonparametric correlations were calculated to inspect the associations
between variables of interest (Table 1). Next, logistic regression was employed to test the
hypothesized relationships, while controlling for price and shopper’s

Table 1. Non-parametric correlations.

Transaction Activity Transaction National
Variable involvement level Experience price culture
1. Engagement in price negotiation .604 .123 .119 . –.127 .286
2. Transaction involvement 1.00 .093 080 .295 –.110 .250
3. Shopper’s activity – 1.00
1.00 –.046 .117 –.153 .
4. Experience – –
– 1.00 026
5. Price – – –.033
 INTERNATIONAL JOURNAL OF ADVERTISING 7
6. Country – – – – 1.00
Notes: N ¼ 498; < .05, < .01.
Table 2. Logistic regression of negotiation disposition.
Variable B S.E. Wald df Sig Exp(B)
Constant –2.793 0.363 58.197 1 0.000 0.061
Transaction involvement 2.873 0.266 116.253 1 0.000 17.688
Shopper’s activity 0.601 0.278 4.665 1 0.031 1.825
Experience 0.462 0.308 2.241 1 0.134 1.587
Price –0.024 0.013 3.650 1 0.056 0.976
Country 1.144 0.272 17.655 1 0.000 3.138
Notes: X2 (5) ¼ 203.68, p < 0.01; R2 (Cox and Snell) ¼ 0.336; R2 (Nagelkerke) ¼ 0.478.

experience. The results (Table 2) indicate that an adequate share of the variance is
explained by the suggested model’s independent variables (Cox and Snell’s R 2 ¼ .34;
Nagelkerke’s R2 ¼ .48). As expected, country (as indicator for national culture) has a positive
significant effect (p < .01) on tendency to engage in online price negotiation, which means
that Russians are more inclined to negotiate than Americans. Transaction involvement also
has a significant effect (p < .01) on tendency to engage in online price negotiation. These
findings provide preliminary support for Hypotheses H1 and H2.

Discussion
The purpose of this study is to examine the effect of shoppers’ culture and product
involvement on engagement in price negotiation on online shopping sites. Our findings
suggest that Russian shoppers (i.e. from collectivist societies) were more inclined to engage
in price negotiation than American shoppers (i.e. from individualistic societies). This result is
in line with consumer culture theory, which suggests that culture is a major predictor of
consumer shopping behaviour (Arnould and Thompson 2005), and specifically that
American consumers refrain from price negotiation (Herrmann 2003). Moreover, in
accordance with the literature on consumer negotiation behavior, the results support
earlier findings that collectivism encourages shoppers’ online negotiation behavior (Bolton,
Warlop, and Alba 2003; Chuah, Hoffmann, and Larner 2014; Lee 2000) and extends this
literature to online shopping contexts.
Interestingly, although American shoppers were more experienced (Table 1), they were
less inclined to negotiate prices than Russian shoppers. One explanation for this may be
rooted in Triandis’s (2001) proposition that highly collectivist people are less inclined to
resolve conflicts personally, and prefer to settle disputes through an authoritative mediator
or intervention.
Following previous research (Kim, Sung, and Drumwright 2018; Pergelova and Angulo-
Ruiz 2017), Study 1 employs country as an indicator for the different cultural values of
individualism/collectivism. Yet, country is not a direct measurement of cultural values. Thus,
although the results imply a relationship of national-cultural values and shopper tendency
to engage in online price negotiation, this design may limit our conclusions only to what the
8 S. LEVY AND Y. GVILI
shopper’s country actually reflects. Study 2 provides a remedy by directly measuring
cultural values (individualism/collectivism) in a lab setting.
An alternative explanation for the variation in price negotiation between Russia and the
U.S. is rooted in shopper income across countries. When shopper income is lower, they may
be more inclined to spend time on negotiating price. As shopper income grows such
behaviour makes less economic sense. To examine this alternative explanation, we tested
the effect of culture on shopper propensity to price negotiate while controlling for shopper
income in Study 2.
Additionally, involvement was found to be positively associated with price negotiation.
The literature on consumer online behaviour suggests that involvement enhances consumer
interaction with websites and brands (Voorveld, Neijens, and Smit 2009). The current
research shows that involvement further translates into interaction with the sellers
themselves in effort to reduce price.
On social commerce platforms, shoppers are potentially exposed to other users’
generated content (UGC), and electronic word of mouth (eWOM), including reviews and
recommendations regarding products, brands and sellers (Edelman, Jaffe, and Kominers
2016). Next, in Study 2, we test the effect of shared eWOM on negotiation behaviors in
online shopping contexts.

Study 2 eWOM as a signal of economic benefits to

customers
New technologies and social media platforms facilitate eWOM – content shared by
customers about a product or a company with a multitude of people and institutions via the
Internet (Hennig-Thurau et al. 2004). Essentially, eWOM involves sharing and exchanging
marketing information regarding brand- and seller-related experiences, with other
consumers in online environments (Chu and Kim 2018). In the past few years, eWOM
communications have accelerated in scope, such that people’s private information
regarding brands, products, and sellers is extensively shared on a global scale (Araujo,
Neijens, and Vliegenthart 2017; De Veirman, Cauberghe, and Hudders 2017).
Shared information consists of various content types and formats, including textual
reviews (De Pelsmacker, Dens, and Kolomiiets 2018), pictures (De Veirman, Cauberghe, and
Hudders 2017; Evans et al. 2017), videos (Hayes, Shan, and King 2018; Schivinski,
Christodoulides, and Dabrowski 2016), and promotional materials. Promotional eWOM
involves shared information about potential economic benefits to customers (e.g. price
discounts, sellers’ willingness to negotiate price) (Vermeir and Van Kenhove 2005) that
result from lowering the costs incurred by the buyer (Chandon, Wansink, and
Laurent 2000).

eWOM’s economic benefits as a driver of customer engagement

eWOM activity is a major driver of customer engagement behaviours (Van Doorn et al.
2010). Engagement accounts for consumers’ interactive brand-related experiences (Brodie
 INTERNATIONAL JOURNAL OF ADVERTISING 9
et al. 2013) and has been conceptualized as a psychological-experiential process (Calder and
Malthouse 2008; Hollebeek 2011), and as a set of activities consumers perform as they
interact with brands and marketers (Rossmann et al. 2016; Shin et al. 2016).
Following Gavilanes et al. (2018), we focus on the interactive-behavioural dimension of
consumer engagement rather than on the psychological state, as this approach better
suited to capture the interactive nature of digital social media (Calder, Malthouse, and
Schaedel 2009). Consumer engagement in digital settings is highly depended on the
platform (Gvili and Levy 2018; Voorveld et al. 2018). Therefore, due to the nature of social
commerce and e-commerce platforms (e.g. Facebook Marketplace, eBay), engagement in
this setting is also expressed as customer interaction with sellers in product price
negotiation aimed to lower product price.
Consumers’ interest in lowering the price paid in a particular transaction constitutes a
basic financial motivation of engagement behaviour (Pentina, Guilloux, and Micu 2018).
Prior to making purchases, consumers often search on various electronic and social
commerce sites (e.g. eBay, GasBuddy) for information that can help them lower product
price (Edelman, Jaffe, and Kominers 2016). Many marketers provide such information by
posting promotional messages on their brands’ social media pages (Schultz and Peltier
2013). Once obtained, consumers may share this information with social media tools (Fu,
Wu, and Cho 2017).

The effect of eWOM on the relationship between collectivism and engagement in price
negotiation
The results of Study 1 show that collectivism is positively related to engagement in price
negotiation. We suggest that eWOM on others’ experiences of price negotiations with a
seller moderates this relationship. Collectivist shoppers tend to receive and share
information from related others and use this information as a basis for decision making
(Pizam and Jeong 1996). Hence, the effect of the additional information they may receive
from outgroup others on social commerce site may be marginal. In contrast, individualistic
consumers prefer to rely on knowledge they collect themselves than seek information from
related others (Griffith, Yalcinkaya, and Rubera 2014). Therefore, the impact of eWOM is
expected to be more profound for individualistic consumers. Hence, the following
hypothesis:
H3: eWOM concerning others’ experiences of price negotiations with sellers will moderate the
relationship between collectivism and engagement in price negotiation. When such eWOM is
shared, this relationship will be stronger for individualist shoppers.

The effect of eWOM on the relationship between involvement and engagement in price
negotiation
As predicted above and supported by the results of Study 1, involvement is positively
related to engagement in price negotiation. We suggest that this relationship is, however,
more complex and contingent on eWOM concerning others’ negotiations. Such information
shared with prospective shoppers signals that price negotiation is possible and potentially
10 S. LEVY AND Y. GVILI
welcomed by the seller. In practice, according to the Elaboration Likelihood Model (ELM)
(Petty, Cacioppo, and Schumann 1983) individuals are more likely to be persuaded by this
message to engage in price negotiation when they are highly involved. Under high
involvement conditions, consumers tend to take the

Figure 1. Conceptual Framework.

central route to persuasion, where they process stimuli (i.e. eWOM) more carefully, and
consider the true merits of the available information. Consequently, the potential benefits
of negotiating price become more salient and influential, and negotiation is likely to be
selected more often. When information concerning others’ price-negotiation experience is
not shared, it will not be available to influence prospective shoppers’ decision to participate
in price negotiation. As a result, the relationship between involvement and engagement in
price negotiation will be stronger when relevant eWOM is shared. Hence, the following
hypothesis:
H4: eWOM concerning others’ experience of negotiating price with sellers will moderate the
relationship between involvement and engagement in price negotiation. When such eWOM
takes place, the relationship between involvement and engagement in price negotiation will be
stronger compared to situations with no such eWOM available.

The overall conceptual framework is illustrated in Figure 1.

Methodology Experimental design and procedure

An experimental design was used to test the research hypotheses, Mock eBay product
pages were designed for three products (a laptop, heartrate tracker and a headset). These
pages included product information, including a picture, price, and a button inviting them to
negotiate product price (see Appendix).
Participants were randomly assigned to one of two experimental conditions. In both
conditions, participants were exposed to reviews including general information about the
 INTERNATIONAL JOURNAL OF ADVERTISING 11
seller (e.g., seller’s rating, other products available). In condition 1 (treatment), participants
were provided with additional information shared online by other eBay users: ‘Other buyers
have negotiated the price with this seller. Some have managed to reduce the selling price’.
In condition 2 (control), this shared information was unrelated to price negotiation: ‘Other
buyers have selected expedited shipping method when ordering from this seller. Some have
received the order in 24 hours’. Executional cues were identical across the two
experimental conditions.
First, participants completed general questions about their experience and history with
shopping sites and eBay in particular. To avoid demand effect bias, participants were told
that this study was part of a research concerning online shopping site design. Next, they
were presented with one mock eBay page and asked to imagine that they were interested
in buying this product on eBay from this seller, and that the seller, price, delivery terms and
warranty suit their needs and desires. Finally, they were asked to follow instructions, and
then complete a questionnaire.

Measures
The survey instrument comprised multiple items designed to measure the study variables
(see Table 3). For culture, we used a six-item scale of collectivism taken from Yoo, Donthu
and Lenartowicz (2011). Involvement with the transaction scale was based on Dholakia
(2001). Shoppers’ overall experience with online shopping was measured using two scales:
online shopping activity, which was measured with three items taken from Khalifa and Liu
(2007), and experience, which was measured with three items based on Simonin and Ruth
(1998). Finally, tendency to engage online in price negotiation was measured with three
items based on Magee, Galinsky, and Gruenfeld (2007) and Reif and Brodbeck (2017).
Participants’ agreement with the items was measured on a seven-point Likert scale from 1
(strongly disagree) to 7 (strongly agree).
Demographic variables were also gathered.

Table 3. CFA – Items’ factor loading and variables’ reliability and validity measures.
Std. Cronbach’s
Variables and Items Coef. AVE CR alpha
Engagement in price negotiation .75 .90 .87

1. I am likely to negotiate the price of the product .76

2. I will probably negotiate the price of the product .95
3. It is possible that I will negotiate the price of the productTransaction .88
involvement .72 .88 .89
1. I have a high level of interest in the purchase process of this product .67 .97
2. I would put a lot of effort into the purchase of this product .87
3. It is important to me to complete the transaction appropriatelyShopper’s
activity .81 .93 .93
1. I shop extensively online .93
2. I shop online for a long time .84
3. I shop online frequentlyShopper’s experience .92 .76 .91 .90
1. I am experienced with eBay’s alternative payment options .88
2. I am experienced with eBay buyer’s alternate options to set prices .82
3. I am experienced with eBay’s alternative shipping options Collectivism .92 .52 .87 .86
12 S. LEVY AND Y. GVILI
1. Individuals should sacrifice self-interest for the group .63
2. Individuals should stick with the group even through difficulties .62 .89
3. Group welfare is more important than individual rewards .79 .61
4. Group success is more important than individual success .75
5. Individuals should only pursue their goals after considering the welfare of the group
6. Group loyalty should be encouraged even if individual goals suffer
Standardized Coefficients, p < .01; AVE ¼ Average Variance Extracted; CR ¼ Composite Reliability.
Sample
A nationally representative sample of adults was recruited from the leading Israeli Internet
online panel in exchange for payment. Israel is used as the social-cultural context for Study
2 because it allows studying consumers with various degrees of orientations toward
individualism/collectivism (Ruvio 2008). This nature of Israel as a culturally heterogeneous
country (Abbas and Mesch 2015) is also supported by the fact that its
individualism/collectivism index is 54 (Hofstede Center 2018) – right in the middle of the
Individualism-Collectivism spectrum (Ruvio and Shoham 2007). Therefore, a representative
sample of individuals drawn from Israel will spread above and below the mid-point of the
scale. This sampling frame provides access to participants with various degrees of
individualism/collectivism.
A total of 468 individuals participated in the online experiment; 235 were randomly
assigned to the treatment condition, and 233 were assigned to the control condition. The
age of participants ranged from 18 to 70 years (M ¼ 33.4, SD ¼ 11.63). Forty-four per cent
of the respondents were males. Most of the participants had average income or above
(76%); and post-secondary education (74%).

Results Manipulation check

A manipulation check procedure was applied to validate the experimental conditions using
items measured on a seven-point Likert scale from 1 (strongly disagree) to 7 (strongly
agree). Participants were asked about the information shared by others during the
transaction (‘Other shoppers shared with me their experience of product price negotiations
with the seller’). As expected, participants in the treatment group reported receiving more
information from others about price negotiation, compared to participants in the control
group (Mtreatment ¼ 4.66, SDtreatment ¼ 2.11, Mcontrol ¼ 3.27, SDcontrol ¼ 1.93; t ¼ 7.42, p < .01). No
difference was found for the extent to which the product page was perceived as realistic
(‘The above transaction on eBay site seems realistic to me’; M treatment ¼ 4.83, SDtreatment ¼
1.61, Mcontrol ¼ 4.63, SDcontrol ¼ 1.72; t ¼ 1.29, p > .05), the offer’s relevance to participants
(‘This eBay transaction could be relevant to me’; M treatment ¼ 4.08, SDtreatment ¼ 1.94, Mcontrol ¼
3.93, SDcontrol ¼ 1.90; t ¼ 0.84, p > .05) or its importance to the participants (‘This eBay
transaction would be important to me, provided that I needed the product’; M treatment ¼ 5.06,

SDtreatment ¼ 1.69, Mcontrol ¼ 4.93, SDcontrol ¼ 1.80; t ¼ 0.41, p > .05). Finally, no difference was
found between the treatment and control groups in terms of time (in seconds) dedicated to
 INTERNATIONAL JOURNAL OF ADVERTISING 13
inspect the stimuli (Mtreatment ¼ 21.33, SDtreatment ¼ 35.03, Mcontrol ¼ 19.58, SDcontrol ¼ 26.58; t ¼
–.61, p > .1). These results validate the research conditions.

Measures validity and reliability

First, items were subjected to an exploratory factor analysis (EFA) with Varimax rotation.
The analysis produced five factors, explaining 75.64% of the cumulative variance. Item
loadings were all above .60. Next, to confirm construct validity, a confirmatory factor
analysis (CFA) was performed. The results show acceptable fit for all measurements (v 2
value (124) ¼ 242.56, p < .05 (v2/df < 2); Comparative Fit Index (CFI) ¼ 0.98;
Table 4. Correlations and the maximum shared squared variance (MSV) a.
Variable 1 2 3 4 5 6 7 8 9
1. Engagement in price negotiation .75 .274 .074 . .070 .105 . .147 .182 .033 .009
2. Transaction involvement .08 .72 245 .193 .062 .
219 .106 .
3. Shopper’s activity .01 .06 .81 .492 125 .052.020
056 .012.029
4. Shopper’s experience .00 .04 .24 .059
.76 .035.066 .093 . .069
5. Price .01 . .05 . .00 . .005 .176
.00 . .005 .
6. Collectivism 02 01 00 – 121 .038
01
7. eWOM Sharing .03 .00 .00 .01 016– .023 .016
.00 .52 .043
8. Income .00 .00 .02 .00
.00 .00 –
.00 .011.069
.00 .00
9. Religiousness .00 .00 .00 .03 .00 .00 .00 .01 –
Notes: N ¼ 468; < .05, < .01; aCorrelations are in the upper right side while the MSV are in the lower left side; AVE
are in bold diagonal.

Normed Fit Index (NFI) ¼ 0.96; and Root Mean Square Error of Approximation (RMSEA) ¼ .
05). All five construct standardized regression estimates were above .50, reflecting
acceptable fit of the measures. Average Variance Extracted (AVE) and composite reliability
(CR) were also calculated and indicated convergent validity. AVE values were .52, .72, .75, .
81 and .76 for collectivism, transaction involvement, tendency to negotiate, online shopping
activity, and experience, respectively. CR values were .87, .88, .90, .93 and .91, respectively.
Internal consistency of the measurements was further examined using Cronbach’s alpha.
The results show acceptable reliability of the measurements: .86 for collectivism, .87 for
transaction involvement, .89 for tendency to negotiate, .93 for online shopping activity
and .90 for experience. Thus, the above measures exhibit acceptable levels of validity and
reliability. AVE values were greater than the square of the correlation estimate between
any pair of these constructs in all cases. This further verifies the discriminant validity of the
constructs. The correlation pattern between variables and the Maximum Shared squared
Variance (MSV) are provided in Table 4.

Empirical findings
ANOVA results show that participant tendency to engage in online price negotiation is
higher under treatment (eWOM sharing) than control (no eWOM sharing) conditions (F(1,
466) ¼ 14.24, p < .01). No significant differences were found for any other variable.

See Table 5 for the results and descriptive statistics.

14 S. LEVY AND Y. GVILI
A path analysis was conducted to test the study’s hypotheses. A three-step procedure
(Cortina, Chen, and Dunlap 2001) was employed to standardize the relevant independent
variables and create interaction variables for the moderation analysis. The path analysis
results show that the overall fit statistics (goodness of fit measures) exhibit an acceptable
level of fit (v2 value (239) ¼ 481.88, v2/df ¼ 2.02, p < .05; CFI ¼ 0.96; NFI ¼ .92; RMSEA ¼ .
05), indicating that the path model is valid. The path model, regression standardized
coefficients, and their significance are depicted in Figure 2.
Table 6 shows the variables’ direct relationships and the statistical measures. Figure 2
depicts a positive direct relationship between collectivism and tendency to engage online in
price negotiation (b¼ .29, p < .01); however, the relationship between transaction
involvement and tendency to negotiate is marginal (b¼ .14, p < .1). A positive relationship
was also found between eWOM sharing and tendency to engage online
Table 5. Descriptive Statistics and ANOVA Results.
Variable Condition N Mean SD Min Max F
Engagement in price negotiation Control 233 3.77 1.76 1.00 7.00

Treatment 235 4.39 1.79 1.00 7.00

Total 468 4.08 1.80 1.00 7.00 14.24

Transaction involvement Control 233 5.22 1.53 1.00 7.00
Treatment 235 5.05 1.74 1.00 7.00

Total 468 5.14 1.64 1.00 7.00 1.26ns

Shopper’s activity Control 233 3.96 1.85 1.00 7.00

Treatment 235 4.00 1.90 1.00 7.00

Total 468 3.98 1.87 1.00 7.00 0.07ns

Shopper’s experience Control 233 3.34 1.69 1.00 7.00

Treatment 235 3.64 1.91 1.00 7.00

Total 468 3.49 1.81 1.00 7.00 3.14ns

Price Control 233 1433.48 1162.85 100 2600

Treatment 235 1450.64 1165.32 100 2600

Total 468 1442.09 1162.88 100 2600 0.03ns

Collectivism Control 233 4.19 1.27 1.00 7.00

Treatment 235 4.16 1.33 1.00 7.00

Total 468 4.18 1.30 1.00 7.00 0.05ns

Income Control 233 3.75 1.79 1.00 7.00

 INTERNATIONAL JOURNAL OF ADVERTISING 15
Treatment 235 3.88 1.70 1.00 7.00

Total 468 3.81 1.75 1.00 7.00 0.69ns

Religiosity Control 233 3.44 2.00 1.00 6.00

Treatment 235 3.40 1.90 1.00 6.00

Total 468 3.42 1.95 1.00 6.00 0.04ns

p < .01.

Figure 2. The moderating Role of eWOM Sharing: A Path Model.

a
Path parameters are standardized parameter estimates. p < .1; p < .05; p < .01

in price negotiation (b¼ .17, p < .01), which suggests that eWOM sharing increases people’s
tendency to engage online in price negotiation. The results further show no significant
effect of the control variables on tendency to engage in price negotiation (price (b¼ .02, p
> .05), shopping activity (b¼ .03, p > .05), experience (b¼.02, p > .05), income (b¼ .00, p > .
05), and religiousness (b¼ .02, p > .05)). Variance Inflation
Table 6. Model’s path relationships.

Regression Weights
Standardized Effect
16 S. LEVY AND Y. GVILI
Direct Estimat C.R. p
e
.286 .403 3.69 <.00
.136 .177 6 1
. .502 1.79 <.1
171 .439 2 <.00
. 1
.331 3.77
216 7 <.01
IncomeReligiousnessShopperPriceeWOM ShoppereWOMeWOMInvolvementColle .023
ctivism!!!’’s experiences activityEngagement in price .169 .018 2.991 <.05
. >.1
negotiationInvolvementCollectivismEngagement in price .000 2.31
030 0 . >.1
negotiationEngagement in price negotiation!!Engagement in price . .004
538 . >.1
022 .015 400
>.1
negotiationEngagement in price negotiationEngagement in price negotiation!
.021 . >.1
Engagement in price negotiation!!!Engagement in price negotiationEngagement
.005 480
in price negotiationEngagement in price negotiation
.019 .
10
2.
43
0
!

Figure 3. The moderation effect of eWOM sharing on the relationship between shopper
collectivism and engagement in price negotiation.

Factors (VIF) for all variables, including the interactions, were all below the threshold levels
(VIF < 3, Hair et al. 2010), indicating there are no issues of multicollinearity.
Additionally, the regression results show a moderation effect of eWOM sharing. The
eWOM sharing and collectivism interaction variable has a negative relationship with
tendency to engage online in price negotiation (b¼.22, p < .01). This indicates that eWOM
sharing dampens the positive relationship between collectivism and tendency to engage
online in price negotiation. That is to say, a less collectivist (or more individualist) culture
has a stronger positive effect on tendency to engage online in price negotiation when
eWOM concerned others’ negotiations is shared (see Figure 3).
In contrast, the interaction variable of eWOM sharing and transaction involvement has a
positive relationship with tendency to engage online in price negotiation (b¼ .17, p < .05).
 INTERNATIONAL JOURNAL OF ADVERTISING 17
This indicates that eWOM sharing strengthens the positive effect of transaction
involvement on tendency to engage in price negotiation. That is, when eWOM is shared, the
positive effect of involvement on tendency to negotiate price is stronger when transaction
involvement is high (Figure 4).
In addition, we performed ANCOVA on the effect of eWOM sharing on price negotiation.
The following variables were included as covariates in the model: transaction

Figure 4. The moderation effect of eWOM sharing on the relationship between transaction
invovlement and engagement in price negotiation.

involvement, shopper’s activity, shopper’s experience, price, collectivism, income, and

religiosity. In line with the path analysis, the results revealed that collectivism and
involvement are significantly related to a tendency to engage in online price negotiation
(Fcollectivism(1, 457) ¼ 8.03, p < .01); Finvolvement(1, 457) ¼ 28.14, p < .01)). Further, both
interactions were significant (FeWOMCollectivism(1, 457) ¼ 5.24, p < .05;

FeWOMInvolvement(1,457) ¼ 8.60, p < .01).

We further tested for these moderation effects using Hayes (2013) PROCESS macro for
Model 1 with 5000 bootstrapped samples, with measured covariate values conditioned at
one SD above or below the mean. Results showed evidence for a significant moderating
effect of eWOM sharing on the relationship between collectivism and tendency to engage
online in price negotiation (B ¼.28; t ¼2.29; p < .05).
We then tested the conditional effects (simple slopes) of collectivism at the two levels of
eWOM sharing. Under the condition of no eWOM sharing (control), the relationship
between collectivism and tendency to engage in price negotiation was significant (B ¼ .31; t
¼ 3.54; p < .01); in contrast, under the condition of eWOM sharing (treatment) this
relationship was not significant (B ¼ .03; t ¼ .40; p > .10). The relationship of product
involvement and price negotiation was also moderated by eWOM sharing (B ¼ .28; t ¼ 2.93;
p < .01). Under the no eWOM sharing condition (control), the relationship between
18 S. LEVY AND Y. GVILI
involvement and tendency to engage in price negotiation was marginally significant (B ¼ .
13; t ¼ 1.74; p < .10); under the condition of eWOM sharing (treatment), this relationship
was significant (B ¼ .41; t ¼ 6.25; p < .01). According to these results, hypotheses H3 and H4
are supported.

Discussion
This study demonstrates the significant impact of eWOM on online shoppers’ inclination to
accept a marketer’s invitation to negotiate product price. Study 2 replicates the main
effects found by Study 1, and further shows that these relationships are moderated by
shared eWOM. Information about other buyers’ experiences with the seller may mitigate
cultural effects on shopping behavior. Specifically, sellers’ invitations to negotiate product
price tend to be accepted more often by individualists under conditions of eWOM sharing.
This suggests that eWOM represents the collective wisdom that individualistic shoppers
lack. The additive contribution of eWOM to collectivistic shoppers is probably not significant
in terms of its effect on their negotiation behavior. In addition, since individualistic shoppers
lack the collective wisdom mentioned above, they may be more aroused by eWOM shared
by other shoppers. This, in turn, leads to stronger and more positive responses to the
message (Hartmann et al. 2014; Ladhari 2007).
In line with ELM, Study 2 shows that the impact of eWOM in supporting shopping
decisions is more profound under high involvement contexts. Under such conditions,
consumers are more inclined to process arguments (e.g., eWOM) that signal economic
merits and consequently negotiate product price with sellers.

General discussion
The aim of this research was twofold: First, to examine the effect of culture and
involvement on shoppers’ tendency to engage in product price negotiation, and second, to
examine the moderating effect of eWOM on these relationships. The first study
demonstrated that national culture affects shoppers’ price negotiation behaviour.
Collectivistic shoppers were found to negotiate product prices more than individualistic
shoppers. This study also confirmed the pivotal role of involvement in shopper’s
engagement in product price negotiation. Shoppers who were highly involved in the
transaction engaged more with price negotiation than those who were less involved.
In Study 2, an online experiment confirmed the results of Study 1 and showed the
moderating effect of eWOM sharing on shopper’s engagement in product price negotiation.
Apparently, sharing eWOM on social commerce platforms bridges the informational gap
between individualist and collectivist shoppers, as the former tend to share less in-group
information (Griffith, Yalcinkaya, and Rubera 2014).
This study also shows that, under conditions of eWOM sharing, shoppers who are highly
involved in the transaction negotiate price more than those who are less involved. As
proposed by ELM (Petty, Cacioppo, and Schumann 1983), higher involvement leads to
higher motivation to process eWOM messages more carefully (treating them as central
 INTERNATIONAL JOURNAL OF ADVERTISING 19
cues), and appreciate the potential added financial value that eWOM conveys. This
translates into shoppers’ engagement in price negotiation.
The current research has implications for theory, practice, and society. First, our findings
enhance our understanding of shopper dynamics in online shopping and social commerce
contexts. Social commerce is the employment of content generation functionality in e-
commerce, such that communication among potential and current buyers is enhanced, and
eWOM sharing regarding products and sellers is facilitated (Hajli et al. 2017). As e-
commerce platforms become more social (e.g., by including more social features and
capabilities, Huang and Benyoucef 2013), they have a greater effect on buyer-seller
interactions and the buying process. Past research indicates that shopper review
information affects shopper interaction with sellers (Xu et al. 2017).
The present research supports this findings, and demonstrates that the influence of social
commerce components (i.e., eWOM) goes beyond a direct effect on interaction. It
moderates the influence of consumer characteristics (i.e., consumer cultural values) on
their tendency to interact with the seller (i.e., negotiate).
In addition, research shows that cultural values are associated with negotiation
behaviour (Chuah, Hoffmann, and Larner 2014). The findings of the current research show
that the level of social commerce, which translates to various degrees of eWOM sharing,
moderates this relationship.
To the best of our knowledge, this is the first research to examine shoppers’ price
negotiation behavior in a social commerce context, and specifically the impact of eWOM on
this behaviour.
This research also adds to the engagement literature by showing that engagement is
enhanced not only by tangible economic benefits offered by marketers (i.e. coupons,
discounts) (Edelman, Jaffe, and Kominers 2016; Pentina, Guilloux, and Micu 2018) but also
by eWOM shared by others regarding the mere option to negotiate price, where the benefit
is uncertain.
This research contributes to consumer culture theory literature by demonstrating that
the influence of cultural differences on consumer behaviour may be mitigated by external
interventions (Bolton, Warlop, and Alba 2003; Nyer and Gopinath 2002). In view of the
increasing popularity of social media, eWOM is a feasible intervention that interacts with
cultural characteristics and affects shoppers’ inclination to negotiate with sellers.
Finally, our findings contribute to pricing theory in marketing by offering an explanation
for recent empirical results that show that fixed and flexible pricing policies coexist in the
same marketplace (Selcuk and Gokpinar 2018). Social media have facilitated eWOM
communication among diverse cultures and ethnicities that are active in the same market
(Hanna, Rohm, and Crittenden 2011). Our findings show that engagement in price
negotiation varies by culture, hence the justification for these policies’ coexistence.
The current research has several practical implications. As global competition increases,
practitioners should note that the cultural diversity of international shoppers may
significantly affect the latters’ inclination to negotiate prices. Hence, inviting shoppers to
negotiate may not be equally effective across markets. Our findings also imply that online
sellers who facilitate eWOM or reviews concerning their invitations to engage in counter-
20 S. LEVY AND Y. GVILI
pricing will find such strategies to be more influential in collectivist cultures and when their
shoppers are highly involved in the transaction.
A social implication of this research relates to the effect of eWOM on enhancing equality
of opportunities across societies. Online shoppers from individualistic societies are
disadvantaged relative to collectivistic shoppers as they tend to refrain from using valuable
shared in-group information (Griffith, Yalcinkaya, and Rubera 2014). Our finding suggest
that individualists may refrain from using in-group information that can lower their costs,
possibly without being aware of the financial benefit they may be missing. eWOM that is
shared on social commerce platforms may help close this gap, by acting as a social equalizer
that provides all shoppers with equal opportunities to take advantage of shoppers’ common
wisdom.
Acknowledgments
The authors thank Yahel Bar-Shi and Chen Shreiber-Bezaleli for helping with the data collection.

Disclosure statement
No potential conflict of interest was reported by the authors.

Notes on contributors
Shalom Levy is a Senior Lecturer of Marketing at the Department of Economics and Business
Administration, Ariel University, Israel. Shalom holds a Ph.D. from Bar-Ilan University. Prior to this, he
worked as a media manager and head of planning and research in advertising companies. His work
has been published in journals as Marketing Letters and International Journal of Advertising and
Journal of Advertising Research. Shalom Levy can be contacted at: shalom@ariel.ac.il.

Yaniv Gvili is an assistant professor of marketing at the School of Business Administration of Ono
Academic College, Israel. Yaniv received his Ph.D. from Temple University. Prior to his academic
career, he worked as an analyst and director of research in a global communications network. Yaniv’s
work has been published in leading journals including Journal of Advertising Research, International
Journal of Advertising, European Journal of marketing, and Psychology & Marketing. Yaniv’s research
interests include word of mouth, social networks, and new media marketing. Email: ygvili@ono.ac.il.

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Appendix
Mock eBay product pages used in Study 2: