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A Causal Model of Information Search on the Internet

The proposed causal model is primarily based on Schmidt
and Spreng’s (1996) conceptual framework with significant modifications by incorporating Internet
specific factors such as Internet skill, online purchase experience, and Internet attributes.
Different types of antecedents including personal factors (skill, knowledge, experience, enduring
involvement, need for cognition, shopping attitude, perceived risk), product factors (product type,
attribute type, price and price dispersion), media factors (interactivity, customization,
accessibility), and situational factors (situational involvement, time pressure) are included and
their inter-relationships are explained in detail (Figure
2-1).

Figure 2-1: A proposed causal
model of online information search

Perceived Ability and External Search

Perceived ability to search is defined here as “the perceived cognitive capability of
searching for and processing information” (Schmidt & Spreng, 1996). Bettman and Park (1980)
assert that search ability will increase search activity. Locander and Hermann (1979) found that
self confidence tended to increase external information search for five different product
categories. Also, Duncan and Olshavsky (1982) found that the perceived ability to judge the
television category resulted in increased external search. Most recently, Selnes and Howell (1999)
showed that perceived cognitive ability increased information search for portable stereos. Klein
and Ford (2002) suggested that in an online environment the ability to navigate on the Internet
will facilitate information gathering and source evaluation. Therefore, the following proposition
is suggested:

Research Proposition 1: Perceived ability to search
increases external search on the Internet.

In an online environment, however, Internet skills and prior purchase experience will become
increasingly important for consumers to repeatedly use the Internet as an information source and
shopping outlet. It is therefore proposed that perceived online search ability may be determined by
Internet skills and prior purchase experience as well as consumer knowledge.

Skill. Novak, Hoffman, and Young (2000) assert that
consumer online navigation and interaction are influenced by his or her online skills. They found
that the higher the level of online skills, the more positive experience users achieved from the
Internet. Based on the economic perspective on information search, Ratchford, Talukdar, and Lee
(2001) posit that an increase in Internet skill will reduce the marginal cost of acquiring a
predetermined level of benefit of search, making external search more likely to increase. Shim et
al. (2001) also found that perceived skill is positively related to consumer online search
intention.

Research Proposition 2: Internet skills increase the
perceived ability to search on the Internet.

Prior Purchase Experience. Researchers have argued that
prior purchase experience on the Internet has a positive effect in predicting the consumer’s use of
the Internet for external search (Klein, 1998; Liang & Huang, 1998; Shim et al., 2001).
Experienced consumers might be more likely than inexperienced consumers to perceive increased
ability to search on the Internet, which will eventually affect external search online in a
positive manner. Hence, the effect of prior experience on information search on the Internet will
depend on the consumer’s perceived ability of external search.

Research Proposition 3: Prior purchase experience increases
the perceived ability to search on the Internet.

Product Knowledge. The relationship between product
knowledge and the amount of external search is mixed. Some researchers have reported a positive
relation between knowledge and search (Brucks, 1985; Duncan & Olshavsky, 1982; Jacoby,
Chestnut, & Fisher, 1978; Schmidt & Spreng, 1996; Selnes & Troye, 1989; Srinivasan
& Ratchford, 1991; Urbany, Dickson, & Wilkie, 1989) whereas others have found negative
effects of knowledge on external search (Beatty & Smith, 1987; Claxton, Fry, & Portis,
1974; Lee et al., 1999; Moore & Lehmann, 1980; Newman & Staelin, 1971, 1972; Urbany, 1986)
and still other studies indicate an inverted U relationship between knowledge and search (Bettman
& Park, 1980; Johnson & Russo, 1984; Park & Lessig, 1981; Raju, Lonial, & Mangold,
1995; Srinivasan & Agrawal, 1988; Urbany et al., 1989). Several researchers further suggest
that objective knowledge and subjective knowledge will have different effects on information search
(Brucks, 1985; Park, Mothersbaugh, & Feick, 1994; Schmidt & Spreng, 1996).

Consumers with high objective knowledge have well-organized information structure and rich
product information which enable them to comprehend and process external information easier
(Brucks, 1985). This indicates that high objective knowledge will influence the consumer’s
perceived ability to search for product information (Schmidt & Spreng, 1996). Subjective
knowledge is related to confidence in the ability to do product-related tasks and past product
experience (Park et al., 1994). Consumers with high subjective knowledge will have heightened
confidence in their ability when performing information search (Duncan & Olshavsky,
1982).

Research Proposition 4: Product knowledge increases the
perceived ability of information search on the Internet.

Perceived Benefits/Costs and External Search

The perceived benefits and costs of search have been examined in the economic analysis
framework (Duncan & Olshavsky, 1982; Guo, 2001; Punj & Staelin, 1983; Urbany, 1986).
Srinivasan and Ratchford (1991) found that perceived benefits of information search were positively
related to external search activity. Schmidt and Spreng (1996) proposed that perceived benefits
increase external information search effort. More recently, Heaney and Goldsmith (1999) found that
consumers perceiving more benefits of search for bank service information did more external search
than those who perceived external search as less beneficial.

The choice and use of the Internet will largely depend on the perceived benefits of the
information provided on the Internet. The Internet makes a large amount of information accessible
at any time in any location. In addition, the Internet enables consumers and marketers to interact
with each other regarding product information, transaction, and delivery. All of these should
improve the perceived benefits of online information search and external search effort.

Perceived costs of search for information refers to the consumer’s evaluation of financial,
psychological, physical, and time expenses. Increased costs will yield less search effort (Bucklin,
1966; Miller, 1993; Moorthy, Ratchford, & Talukdar, 1997; Punj & Staelin, 1983; Srinivasan,
1987; Stigler, 1961). In a grocery shopping setting, Putrevu and Ratchford (1997) found that
perceived time cost significantly decreased external search effort. In a similar vein, DeSarbo and
Choi (1999) found that perceived costs of search, time, and evaluation were negatively related to
external search.

It appears reasonable to suggest that the Internet is capable of decreasing search costs by
offering rich product information (Bakos, 1997; Liang & Huang, 1998). Higher accessibility to
information and lower information and time costs bring consumers to the Internet with the
possibility of becoming fully informed about products (Bakos, 1997; Brynjolfsson & Smith, 2000;
Dickson, 2000).

There exist a number of antecedents that influence either the benefit or the cost of search
or both. For instance, prior online purchase experience may decrease the perceived benefit of
search but does not change the perceived cost. However, the Internet’s easy access and convenience
may decrease search cost and increase search benefit at the same time. Information gathered is
therefore a function of the perceived benefits of search and cost of information (Kiel &
Layton, 1981; Ratchford et al., 2003; Srinivasan & Ratchford, 1991). Thus, it is suggested that
the determinants of external search efforts depend on the net effect of the perceived benefit and
cost (perceived benefit minus perceived cost).

Research Proposition 5: The perceived net benefits of search
increases external search on the Internet.

The key determinants of net benefits of search on the Internet involve prior purchase
experience, product knowledge, perceived risk, situational involvement, media attitude, time
pressure, and product characteristics, among others.

Prior Purchase Experience. Consumers with prior purchase
experience tend to have procedures for simplifying decisions and reducing the amount of information
sought (Kiel & Layton, 1981; Newman & Staelin, 1972; Punj & Staelin, 1983; Srinivasan
& Ratchford, 1991). For example, Newman and Staelin (1971) found that when purchasing a new car
or appliances, consumers with prior purchase experience tended to spend less time to make a
decision. Prior purchase experience is closely related to what is termed as specific brand
knowledge (Fiske, Luebbehusen, Miyazaki, & Urbany, 1994). Fiske et al. (1994) suggest that this
knowledge (experience) tends to decrease external search effort. It could be that previous purchase
experience on the Internet will reduce the perceived benefits of search, which will consequently
decrease external search effort on the Internet for information. A recent study found that
experience led to a slight decrease in the number of visited sites for air travel (Johnson, Moe,
Fader, Bellman, & Lohse, 2002). Thus, it is proposed that:

Research Proposition 6: Prior purchase experience decreases
the net benefits of information search on the Internet.

Product Knowledge. Several researchers have suggested a
negative relationship between subjective knowledge and the benefits of external search (Brucks,
1985; Urbany et al., 1989; Schmidt & Spreng, 1996). Consumers who are confident in product
purchase are likely to engage less in external search because they feel less need for information,
which is associated with lower perceived benefits of search (Johnson & Russo, 1984). However,
other researchers argued that consumer knowledge facilitates information search by recognizing a
purchase problem properly and locating relevant information (Brucks, 1985; Selnye & Troye,
1989). This should reduce the cognitive costs of information search. Hence, the effect of consumer
knowledge will depend on its relative effect on perceived costs and benefits of information
search.

Research Proposition 7: Product knowledge will have a
positive, negative, or inverted U relationship with the amount of external search depending on its
relative effect on the perceived net benefits of information search on the Internet.

Perceived Risk. Perceived risk is consumer uncertainty in
a purchase context about financial, performance, social, psychological, safety, and
time/convenience gain or loss (Murray, 1991). When faced with increasing perceived risk, consumers
tend to seek more product information from various sources in order to diminish purchase
uncertainty (Mitra, Reiss, & Capella, 1999; Taylor, 1974). For example, Lutz and Reilly (1973)
found that consumers used more information sources when there was a higher level of perceived
performance risk than when performance risk was low. Similarly, Hugstad, Taylor, and Bruce (1987)
found that in a high risk purchase situation such as buying major appliances, consumers used more
sources of information than they did in low risk situations. The role of personal sources of
information (friends, family, and salespeople) appears to be more important in high than low risk
situations. When purchasing computer and audio equipment in an in-home shopping context, consumers
perceiving a high risk of purchase increased external search effort (Sundaram & Taylor, 1998).
Because Internet shopping is a relatively new mode of shopping involving various kinds of perceived
risks due to its nature of virtuality, consumers will likely put more importance on information
search when using the Internet (Shim et al., 2001).

Research Proposition 8: Perceived risk increases the net
benefits of information search on the Internet.

Situational Involvement. Many researchers have agreed on
the important role of involvement in determining consumer prepurchase search for brand information
and suggested that situational involvement will increase processing effort (Beatty & Smith,
1987; Greenwald & Leavitt, 1984; Lee, Herr, Kardes, & Kim, 1999; Petty, Cacioppo, &
Schumann, 1983; Swoboda, 1998). If the personal relevance of a specific purchase is increased,
consumers tend to allocate more cognitive resources and are more motivated to process or search for
relevant information.

Celsi and Olson (1988) proposed that consumers in high involvement state (felt involvement)
are more likely to process information thoroughly than those in low involvement state. Their
results indicate that involvement state has a positive relationship with the amount of attention,
the number of thoughts, and proportion of product-related thoughts. Lee et al. (1999) found that
consumers with high issue involvement searched for more product information than low involvement
consumers. It was also found that high product knowledge (both subjective and objective) produced
less external search than low knowledge.

Research Proposition 9: Situational involvement increases
the net benefits of information search on the Internet.

Attitude toward the Internet. Li, Kuo, and Russell (1999)
found that frequent online shoppers tended to have more positive perception of channel attributes
than non shoppers. They argued that frequent online shoppers perceive the Internet to be
significantly higher in the three aspects of channel attributes (communication, distribution,
accessibility) than non-shoppers. One of the important attributes of the Internet is its easy
access and ubiquitousness. The ease of gathering product information on the Internet is likely to
increase consumer intention to search and to process because the more available the information is
to consumers, the lower the cost of search will be (Bettman, 1979; Schmidt & Spreng, 1996).
Similarly, in his interaction model of information search, Klein (1998) posits that characteristics
of the Internet such as user control and interactivity, customizability, and accessibility will
influence perceived benefits of search and external search activity.

Research Proposition 10: Positive attitude toward the
Internet increases the net benefits of information search on the Internet.

Time Pressure. Time pressure, or consumer’s perception of
time availability, affects the amount of information gathered in a pre-purchase situation (Beatty
& Smith, 1987; Claxton et al., 1974; Katona & Mueller, 1955; Newman & Staelin, 1972;
Sundaram & Taylor, 1998). For example, for the purchase of analgesics and shoes, consumers
decrease external search when they feel pressured by the urgency of the purchase situation (DeSarbo
& Choi, 1999). Similarly, Weenig and Maarleveld (2002) found that under time constraint,
subjects adopted selective search strategy by decreasing the number of attributes inspected. Time
pressure, it seems, increases the perceived cost of external search in a general prepurchase
setting (Schmidt & Spreng, 1996). However, time pressure may affect information search on the
Internet to a lesser extent. Because Internet users are generally time starved and convenience
seekers (Donthu & Garcia, 1999), under time pressure, they are more likely to use the Internet
for information search. With various interactive tools and agents providing more information
efficiently (Haubl & Trifts, 2000), time pressed consumers will be able to search without
increased search cost.

Research Proposition 11: Time pressure does not decrease the
net benefits of information search on the Internet when compared to other information
sources.

Product Characteristics. Most information search studies
have focused on products, especially consumer durable goods such as automobiles (Kiel & Layton,
1981; Ratchford et al., 2003; Srinivasan & Ratchford, 1991) and appliances (Beatty & Smith,
1987; Newman & Staelin, 1971; Urbany, 1986) whereas information search in the service area has
not been well documented (Heaney & Goldsmith, 1999). Researchers recently began to devote more
attention to studying information search effort for services (Chang & Hanna, 1992; Iglesias
& Guillen, 2002; Lee & Hogarth, 1998, 2000a, 2000b; Maute & Forrester, 1991; Menon,
Deshpande, Perri, & Zinkhan, 2002; Murray & Schlacter, 1990).

Compared to consumer products, service is characterized as intangible, heterogeneous,
inseparable, and perishable (Venkatraman & Dholakia, 1997). Research suggests that differences
between products and services may yield different consumer search and acquisition behavior. Because
information about banking, phone, medical and veterinary services is experiential and intangible in
nature, consumers tend to seek less information for services than for products (Venkatraman &
Dholakia, 1997). Freiden and Goldsmith (1989) found that for professional services such as medical,
dental, legal, and veterinary services, consumers sought personal sources of information (i.e.,
friends, coworkers) more frequently than non-personal sources (i.e., advertisements).

However, differences in information search behavior for products and services are likely to
be less pronounced on the Internet. Due to its virtual capability of providing a limitless amount
of information quickly, the Internet is able to substitute various types of personal and
non-personal information sources such as media, word of mouth communication, consumer opinions,
expert comments, and even retail-like displays which are beneficial for both products and
services.

Research Proposition 12: Consumer products as well as
services increase the net benefits of information search on the Internet.

Motivation and External Search

Motivation to search refers to “the desire to expend
effort in the collection and processing of information, which is characterized by both direction
and the intensity of effort” (Schmidt & Spreng, 1996, p. 250). Recently, Ramaswani, Strader,
and Brett (2001) found that willingness to use the Internet was positively related to increase in
information search on the Internet when financial services were considered.

Research Proposition 13: Higher motivation to search
increases consumer external search on the Internet.

Among individual difference variables, enduring involvement, need for cognition, and shopping
attitude are likely to influence consumer motivation to search for information on the
Internet.

Enduring Involvement. Enduring involvement refers to the
persistent interest in an object and its importance (Zaichkowsky, 1994). Prior research
(Srinivasan, 1987; Srinivasan & Ratchford, 1991) suggests a positive relationship between
interest and search. Consumers who are interested in the product category will be more likely to
engage in information search effort for the product category (Howard & Sheth, 1969). With
respect to the effect of involvement on search behavior, high level of ego involvement leads to a
greater amount of information search (Beatty & Smith, 1987). Celsi and Olson (1988) found that
consumers spent more time attending to information when their involvement was increased. Hence,
enduring involvement might be positively related to motivation to perform external search.

Research Proposition 14: Higher enduring involvement
increases consumer motivation to engage in information search on the Internet.

Need for Cognition. Need for cognition (NFC) is defined as
“the tendency for an individual to engage in and enjoy thinking” (Cacioppo & Petty, 1982) which
emphasizes individual differences in cognitive efforts. High NFC individuals tend to elaborate more
extensively on information and exert more cognitive effort on processing product information than
low NFC individuals. NFC is an important motivational antecedent of information search, and several
studies have suggested that high NFC individuals are more likely to engage in effortful search
processes than low NFC individuals (Verplanken, 1993; Verplanken, Hazenberg, & Palenwen, 1992).
For example, Inman, McAlister, and Hoyer (1990) found that in a grocery shopping setting, high NFC
consumers tended to search for more information than did low NFC consumers. Also Verplanken (1993)
found that when asked to search for information about refrigerators, high NFC subjects expended
more cognitive efforts than low NFC subjects. All of these seem to suggest that high NFC
individuals could be motivated to expend more effort on cognitive tasks than low NFC individuals in
an information rich online environment.

Research Proposition 15: Higher need for cognition increases
consumer motivation to engage in information search on the Internet.

Shopping Attitude. Consumers have different goals and
motivations when shopping for products (Babin, Darden, & Griffin, 1994; Darden & Dorsch,
1990; Stone, 1954; Tauber, 1972; Westbrook & Black, 1985, for retail shopping; Akaah,
Korgaonkar, & Lund, 1995; Eastlick & Feinberg, 1999, for in-home shopping; Eastlick &
Lotz, 1999; Parsons, 2002; Wolfinbarger & Gilly, 2001; Wolin, Korgaonkar, & Lund, 2002, for
Internet shopping). In general, shoppers pursue either utilitarian, functional, goal-directed
(Donthu & Garcia, 1999; Papacharissi & Rubin, 2000) or hedonistic, non-functional,
recreational activities (Bellenger & Korgaonkar, 1980; Holbrook & Hirschman, 1982).

A number of researchers argued that attitudes and beliefs about shopping should have a
positive influence on external search behavior (Beatty & Smith, 1987; Duncan & Olshavsky,
1982; Klein, 1998; Schmidt & Spreng, 1996; Shim et al., 2001). For example, Li et al. (1999)
found that frequent Internet shoppers are more convenience seekers and are lower in the
experiential shopping orientation than less frequent Internet shoppers. Donthu and Garcia (1999)
also found that Internet shoppers tend to seek more convenience than non-shoppers. More recently,
Shim et al. (2001) found a positive relationship between attitude and intention to use the Internet
for information search. In terms of the effect of price and brand (economic shopping orientation),
Shim et al. (2001) posit that consumers who highly evaluate the economic aspect of shopping will be
more likely to use the Internet for an information source.

As discussed above, the Internet is capable of providing a variety of product information
with low cost and effort, thus increasing the convenience and economic value of online information
search. The Internet, however, seems relatively less effective in fulfilling experiential aspects
of shopping motivation due to its inability to provide direct examination or trial of the product.
Therefore, the following propositions are proposed:

Research Proposition 16a: Consumers with high convenience
shopping orientation have higher motivation to engage in online information search than consumers
with low convenience shopping orientation.

Research Proposition 16b: Consumers with high economic
shopping orientation have higher motivation to engage in online information search than consumers
with low economic shopping orientation.

Research Proposition 16c: Consumers with high experiential
shopping orientation do not have higher motivation to engage in online information search than
consumers with low experiential shopping orientation.