Title: Signals speak louder than words: navigating information asymmetry through information quality and social media use

Authors: Priyadarshi Ranjan; Susmita Ekka; G.V.R.K. Acharyulu; Mohan Venkatesh Palani

Addresses: Department of Management, Humanities and Social Sciences, NIT Agartala, Tripura, 799046, India ' School of Business Studies, Central University Jammu, Jammu, 181143, India ' School of Management Studies, University of Hyderabad, Hyderabad, 500046, India ' Paari School of Business, SRM University-AP, Amaravati 522 240, Andhra Pradesh, India

Abstract: The problem of information asymmetry presents a significant obstacle for online marketplaces because of the numerous buyers and sellers on these platforms, which creates adverse selection. Such information asymmetry affects consumer trust and behaviour. To mitigate this issue, operators of online marketplaces endeavour to disseminate clear and distinct signals through the calibre of information, presentation of their websites, and utilisation of social media, thereby enabling consumers to make informed decisions. This study employs signalling and expectation-confirmation theories to investigate the combined effect of website information quality and social media in creating signals about anticipated product quality. Primary data were gathered from a diverse group of students and analysed using structural equation modelling (SEM). The results indicate that website information quality conveys positive signals, whereas social media sends negative signals regarding the expected product quality. An online marketplace operator should differentiate signals to aid consumers in making informed decisions by enhancing website information quality and social media activities. Online marketplaces should limit the number of ads for social media users because they are generally well-informed about new opportunities and market trends.

Keywords: signalling theory; website information quality; social media use; product quality informed decision; online marketplace; structural equation modelling; SEM.

DOI: 10.1504/IJIMA.2026.156052

International Journal of Internet Marketing and Advertising, 2026 Vol.25 No.2, pp.211 - 236

Received: 29 Sep 2023
Accepted: 16 Apr 2024
Published online: 02 Sep 2026 *

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