Effects of seller certificates on buyer's order cancellation in the E-marketplace

E-marketplaces are implementing various policies to reduce the information asymmetry between sellers and buyers. One popular way is to issue different kinds of certificates (or seals) for sellers, e.g., a quality certificate for sellers who have a lower product return rate than others or a quick certificate for sellers who dispatch products faster than others. Despite a plethora of previous studies on the role of certificates in the e-marketplace, we have a limited understanding of certificate effects in the post-order stage, where buyers can reverse their purchase decision. Based on the psychological contract violation theory and other related literature, we first explain why seller certificates can take a role in buyers' order cancellation decision. Then, we empirically examine the effects of seller certificates using the large transaction data from a leading e-marketplace in Korea. Our findings are as follows. Given the time elapsed from the order, buyers are less likely to cancel the order when the seller has a quality certificate (for sellers who have lower product return rate than others) or a quantity certificate (for experienced sellers who sold a larger amount of products than others). When the seller has a quick certificate (for sellers who dispatch products faster than others), on the other hand, buyers are more likely to cancel the order. Further, the effects of seller certificates on order cancellation are largely varying across purchase channels (Smartphone vs. PC) and product types (convenience goods, shopping goods, vs. specialty goods).