International Journal of Advertising

The Review of Marketing Communications

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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/10.1080/02650487.2019.1612621

Online shopper engagement in price negotiation: the

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

ABSTRACT ARTICLE HISTORY

The strategy of inviting online shoppers to negotiate product pri-ces Received 15 August 2018
has been employed by numerous online sellers due to its benefits Accepted 17 April 2019
for buyers and sellers. Social media facilitates sharing information
regarding such economic benefits among shoppers, thereby KEYWORDS
Online shopping;
generating eWOM, which boosts online social commerce. Yet not
engagement; eWOM;
all buyers choose to embrace sellers’ offers to negotiate product
negotiation; involvement;
price. In the current paper, we employ consumer culture theory and collectivism
the elaboration likelihood model to theorize the effects of culture
and involvement on consumer engagement in price negotiation.
Two studies were designed to test the pro-posed 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 labora-tory 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 negoti-ation was mitigated, and the effect
of involvement was strength-ened. 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 encour-aged
would-be buyers to contact sellers and engage in real-time price negotiation using
Messenger (Facebook 2018). Consumer Reports praised Marketplace and its sel-lers for
welcoming online shoppers to counter offers because its commercial data sug-gest 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 negoti-ation 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).

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
2 S. LEVY AND Y. GVILI

Welcoming customer engagement in bargaining has also become common practice

for traditional retailers (Stout 2013), as customers have become more informed,
inter-connected 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
informa-tion 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
dia-logues (Colliander, Dahlen, and Modig 2015), reinforcing buyer–seller
relationships (Chan, Cheng, and Hsu 2007; Rappaport 2010). In addition, inviting
shoppers to nego-tiate 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’
pro-pensity 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 labora-tory 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 mar-
keting 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 negotiations, both parties attempt to maximize their benefits
 INTERNATIONAL JOURNAL OF ADVERTISING 3

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 counter-offering while shopping. Yet, not all consumers choose to negotiate (De
Kervenoael, Hallsworth, and Elms 2014). Research suggests that cultural factors
may be the under-lying 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 applica-
tions 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 pro-mote 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 2002; Holt 1997; Thompson and Hirschman 1995). CCT
4 S. LEVY AND Y. GVILI

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 inten-tions 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
dif-ferentiate 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 indi-vidualistic 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,
inter-dependency, and group decisions. Highly collectivistic shoppers have a social
obliga-tion 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 usu-ally narrower than individualists (Van Hoorn 2015). Marketing research
shows that the overall lower trust collectivists assign to out-group sellers further
hurts their percep-tion 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 sensi-tive 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
con-texts (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 antece-dents, 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
purchas-ing price. Second, consumers’ primary motivation to negotiate a product
price is to gain better value (Sharma and Krishnan 2001). Under low involvement
conditions, pur-chase 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 sys-
tem 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 (M US ¼ 12.70,
SDUS ¼ 10.72, MRussia ¼ 13.16, SDRussia ¼ 11.11; t ¼ .48, p > .10).
Measurement procedure: Of the two sampled nationalities, Americans consistently
score higher than Russians on Hofstede’s individualism/collectivism index; for
6 S. LEVY AND Y. GVILI

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; cod-
ing 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 meas-
ured 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
counter-offering 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 transac-tion 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 associa-
tions 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 –.110 .250
3. Shopper’s activity – 1.00 .295 –.046 –.153
4. Experience – – 1.00 .117 .026
5. Price – – – 1.00 –.033
6. Country – – – – 1.00
Notes: N ¼ 498; < .05, < .01.
 INTERNATIONAL JOURNAL OF ADVERTISING 7

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
2 2 2
Notes: X (5) ¼ 203.68, p < 0.01; R (Cox and Snell) ¼ 0.336; R (Nagelkerke) ¼ 0.478.

experience. The results (Table 2) indicate that an adequate share of the variance is
2
explained by the suggested model’s independent variables (Cox and Snell’s R ¼ .
2
34; Nagelkerke’s R 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 find-ings
suggest that Russian shoppers (i.e. from collectivist societies) were more inclined to
engage in price negotiation than American shoppers (i.e. from individualistic soci-eties).
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 nego-
tiation 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 cul-
tural 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 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,
8 S. LEVY AND Y. GVILI

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
explan-ation, 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 negoti-
ation. The literature on consumer online behaviour suggests that involvement
enhan-ces 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 et al. 2013) and has been conceptualized as a psychological-
experiential pro-cess (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).
 INTERNATIONAL JOURNAL OF ADVERTISING 9

Following Gavilanes et al. (2018), we focus on the interactive-behavioural dimension

of consumer engagement rather than on the psychological state, as this approach bet-
ter 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 infor-mation 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 con-trast, 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, how-
ever, more complex and contingent on eWOM concerning others’ negotiations. Such
information shared with prospective shoppers signals that price negotiation is possible
and potentially 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
10 S. LEVY AND Y. GVILI

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-negoti-ation experience is not shared, it will not be available to influence
prospective shop-pers’ 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 seller (e.g., seller’s rating, other products available). In condition 1 (treat-
ment), participants were provided with additional information shared online by other
eBay users: ‘Other buyers have negotiated the price with this seller. Some have
 INTERNATIONAL JOURNAL OF ADVERTISING 11

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
varia-bles (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 negoti-ation 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 product .88
Transaction involvement .72 .88 .89
1. I have a high level of interest in the purchase process of this product .67
2. I would put a lot of effort into the purchase of this product .97
3. It is important to me to complete the transaction appropriately .87
Shopper’s activity .81 .93 .93
1. I shop extensively online .93
2. I shop online for a long time .84
3. I shop online frequently .92
Shopper’s experience .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 .92
Collectivism .52 .87 .86
1. Individuals should sacrifice self-interest for the group .63
2. Individuals should stick with the group even through difficulties .62
3. Group welfare is more important than individual rewards .89
4. Group success is more important than individual success .79
5. Individuals should only pursue their goals after considering the welfare of the group .61
6. Group loyalty should be encouraged even if individual goals suffer .75
Standardized Coefficients, p < .01; AVE ¼ Average Variance Extracted; CR ¼ Composite Reliability.
12 S. LEVY AND Y. GVILI

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
con-text for Study 2 because it allows studying consumers with various degrees of
orienta-tions 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
partici-pants 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 dur-ing
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’; Mtreatment 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’; Mtreatment 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 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 rota-
tion. 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 measure-
ments (v2 value (124) ¼ 242.56, p < .05 (v2/df < 2); Comparative Fit Index (CFI) ¼ 0.98;
 INTERNATIONAL JOURNAL OF ADVERTISING 13

a
Table 4. Correlations and the maximum shared squared variance (MSV) .
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 .219 .106 .029 .062 .020
3. Shopper’s activity .01 .06 .81 .492 .035 .056 .012 .125 .052
4. Shopper’s experience .00 .04 .24 .76 .066 .093 .069 .059 .176
5. Price .01 .05 .00 .00 – .121 .005 .005 .023
6. Collectivism .02 .01 .00 .01 .01 .52 .016 .038 .016
7. eWOM Sharing .03 .00 .00 .00 .00 .00 – .043 .011
8. Income .00 .00 .02 .00 .00 .00 .00 – .069
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 com-
posite reliability (CR) were also calculated and indicated convergent validity. AVE val-
ues 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 pro-vided 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.
A path analysis was conducted to test the study’s hypotheses. A three-step
proced-ure (Cortina, Chen, and Dunlap 2001) was employed to standardize the
relevant inde-pendent variables and create interaction variables for the moderation
analysis. The path analysis results show that the overall fit statistics (goodness of fit
2 2
measures) exhibit an acceptable level of fit (v value (239) ¼ 481.88, v /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 (b ¼ .29, p < .01); however, the relationship between trans-
action involvement and tendency to negotiate is marginal (b ¼ .14, p < .1). A positive
relationship was also found between eWOM sharing and tendency to engage online
14 S. LEVY AND Y. GVILI

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 1.26
ns
Total 468 5.14 1.64 1.00 7.00
Shopper’s activity Control 233 3.96 1.85 1.00 7.00
Treatment 235 4.00 1.90 1.00 7.00 0.07
ns
Total 468 3.98 1.87 1.00 7.00
Shopper’s experience Control 233 3.34 1.69 1.00 7.00
Treatment 235 3.64 1.91 1.00 7.00 3.14
ns
Total 468 3.49 1.81 1.00 7.00
Price Control 233 1433.48 1162.85 100 2600
Treatment 235 1450.64 1165.32 100 2600 0.03
ns
Total 468 1442.09 1162.88 100 2600
Collectivism Control 233 4.19 1.27 1.00 7.00
Treatment 235 4.16 1.33 1.00 7.00 0.05
ns
Total 468 4.18 1.30 1.00 7.00
Income Control 233 3.75 1.79 1.00 7.00
Treatment 235 3.88 1.70 1.00 7.00 0.69
ns
Total 468 3.81 1.75 1.00 7.00
Religiosity Control 233 3.44 2.00 1.00 6.00
Treatment 235 3.40 1.90 1.00 6.00 0.04
ns
Total 468 3.42 1.95 1.00 6.00
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 (b ¼ .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 (b ¼ .02, p > .05), shopping activity (b ¼ .03, p > .05), experience (b ¼ .02, p > .
05), income (b ¼ .00, p > .05), and religiousness (b ¼ .02, p > .05)). Variance Inflation
 INTERNATIONAL JOURNAL OF ADVERTISING 15

Table 6. Model’s path relationships.

Regression
Weights
Standardized Effect
Direct Estimate C.R. p
Collectivism ! Engagement in price negotiation .286 .403 3.696 <.001
Involvement ! Engagement in price negotiation .136 .177 1.792 <.1
eWOM ! Engagement in price negotiation .171 .502 3.777 <.001
eWOM Collectivism ! Engagement in price negotiation .216 .439 2.991 <.01
eWOM Involvement ! Engagement in price negotiation .169 .331 2.310 <.05
Shopper’s activity ! Engagement in price negotiation .030 .023 .538 >.1
Shopper’s experience ! Engagement in price negotiation .022 .018 .400 >.1
Price ! Engagement in price negotiation .021 .000 .480 >.1
Income ! Engagement in price negotiation .005 .004 .102 >.1
Religiousness ! Engagement in price negotiation .019 .015 .430 >.1

Figure 3. The moderation effect of eWOM sharing on the relationship between shopper
collectiv-ism 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 (b ¼ .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 indi-
vidualist) 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 (b ¼ .
17, p < .05). 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 negoti-
ation. The following variables were included as covariates in the model: transaction
16 S. LEVY AND Y. GVILI

Figure 4. The moderation effect of eWOM sharing on the relationship between

transaction invovle-ment 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 negoti-
ation (Fcollectivism(1, 457) ¼ 8.03, p < .01); Finvolvement(1, 457) ¼ 28.14, p < .01)). Further,
(F (1, 457) ¼ 5.24,
both interactions were significant eWOM Collectivism p < .05;
F
eWOM Involvement(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 condi-
tioned 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 ten-
dency to engage online in price negotiation (B ¼ .28; t ¼ 2.29; p < .05).
We then tested the conditional effects (simple slopes) of collectivism at the two lev-els
of eWOM sharing. Under the condition of no eWOM sharing (control), the relation-ship
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 (treat-ment) 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 relation-ship between
involvement and tendency to engage in price negotiation was margin-ally 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’ inclin-
ation 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
 INTERNATIONAL JOURNAL OF ADVERTISING 17

seller may mitigate cultural effects on shopping behavior. Specifically, sellers’ invita-
tions 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 col-lectivistic shoppers is probably not significant in terms of its effect on
their negoti-ation 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 behav-
iour. Collectivistic shoppers were found to negotiate product prices more than indi-
vidualistic 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
nego-tiation. Apparently, sharing eWOM on social commerce platforms bridges the
informa-tional 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 involve-ment leads
to higher motivation to process eWOM messages more carefully (treating them as
central 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).
18 S. LEVY AND Y. GVILI

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. cou-pons, 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
explan-ation for recent empirical results that show that fixed and flexible pricing
policies coexist in the same marketplace (Selcuk and Gokpinar 2018). Social media
have facili-tated eWOM communication among diverse cultures and ethnicities that
are active in the same market (Hanna, Rohm, and Crittenden 2011). Our findings
show that engage-ment 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 shop-
pers 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-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 find-ing 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.
 INTERNATIONAL JOURNAL OF ADVERTISING 19

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
compa-nies. 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
aca-demic career, he worked as an analyst and director of research in a global
communications net-work. 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: