The Effect of Choice Deferral on Consumers Free-Riding Behavior

Erni Shangguan

Abstract: With the advent of the Internet era, information asymmetry forms the phenomenon of free riding, and consumers' choice deferral in the case of information asymmetry will result in substantial free riding behavior. Using mathematical modeling method, this paper analyzes the impact of choice deferral on consumers' free-riding behavior, and further analyzes the impact on merchants' prices and profits. The results show that consumers' choice deferral will lead to the emergence of free-riding behavior, which is beneficial to the revenue of online platforms and will reduce the total revenue of merchants. The total profits of merchants and platforms will rise or fall depending on the hassle cost of buying online and the extent to which the information provided by the platform changes consumers' perception of the product.

Keywords: choice deferral, free-riding behavior, information asymmetry