Deal or no deal? How number of buyers, purchase limit, and time‐to‐expiration impact purchase decisions on group buying websites

Information typically posted on group buying websites includes number of previous buyers, whether a limit has been placed on purchase number, and the time remaining until the deal expires. The purpose of this paper is to demonstrate that these factors may interact such that, under certain circumstances, purchase likelihood is reduced.

The paper first examines actual online data; the authors then follow this with a 2×2×2 experiment in which they demonstrate psychological process.

Providing previous‐buyer‐number information can have a positive effect on a consumer's decision to purchase at an online group buying website (e.g. Groupon). Imposing a purchase limit can increase these positive effects, but providing information on time‐to‐expiration (if it is relatively long) can negate the effects. Both perceived value and anticipated regret are found to be mediating factors.

It is possible that effects may be attenuated as a result of product familiarity.

Retailers should pay particular attention to the timing or pattern of purchases on group buying websites, and provide information accordingly.

This paper is the first to show how the three factors noted previously may interact to reduce purchase intentions.