Project

Expiring Coupons for e-Markets

Conversion rates (ratio of visitors to buyers) on the Internet are amazingly low. In our current work, we suggest that one of the most noted advantages of electronic commerce�low search costs�also turns out to be a major reason for low conversion rates. We claim that the low search costs associated with finding products and information about them can cause indecision and procrastination. Moreover, the possibility of finding additional information after a decision has been made has a high potential for regret, which also increases indecision to buy. We are interested in exploring how to overcome these indecision problems. We suggest that imposing deadlines can act as a psychological device that will promote more decisive actions. The mechanism upon which we focus is one where discounts, but not product offers, have a limited lifetime (in the form of expiring discounts).