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Improving Customer Reactions to Electronic Brokered Ultimatums: The Benefits of Prior Experience and Explanations

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Abstract

Because of the growth of online discount travel intermediaries (e.g., Priceline), researchers have become interested in how customers react to electronic brokered ultimatum bargaining contexts. This paper investigates how characteristics of the customer and characteristics of the bargaining context might ameliorate customers' (a) perceptions of justice; (b) willingness to recommend the intermediary to others; and (c) willingness to repatronize the intermediary. We found that customer familiarity generally improved customer reactions to the electronic intermediary. We found a moderating effect for intermediary explanations in the form of an excuse, as explanations improved customer reactions when offers were rejected, but worsened reactions when offers were accepted.

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