Understanding consumer online shopping behaviour from the perspective of transaction costs

3.3.2 TCT as an Integrative Theory 
As discussed in Chapter 2 (Literature Review), consumer decision-marking research has 
grown rapidly during the past three decades (Darley
 et al.
2010, Punj 2012). As a result, 
theories such as expected utility theory (von Neumann and Morgenstern 1947), satisficing 
theory (Simon 1956), prospect theory (Kahneman and Tversky 1972), stimulus-organism-
response framework (Mehrabian and Russell 1974), flow theory (Csikszentmihalyi 1975), 
regret theory (Bell 1982), theory of reasoned action (Ajzen and Fishbein 1980), its derivative 
theory of planned behaviour (TPB) (Ajzen 1985, Ajzen 1991), and technology acceptance 

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model (TAM) (Davis
 et al.
1989), have been developed and tested in a variety of contexts. 
However, no single unifying theory has emerged to explain consumer decision-making and it 
seems unlikely individual decision processes fit neatly into a single decision theory (Sirakaya 
and Woodside 2005). This is highlighted in online consumer behaviour research, where many 
different models have been suggested (Clawson and Knetsch 1966, Nicosia 1966, Thompson
 
et al.
1991, Goodhue and Thompson 1995, Delone and Mclean 2004) and many 
psychological theories have been tested (Rogers 1995, Compeau
 et al.
1999, Bhattacherjee 
2001, Venkatesh
 et al.
2003). In this sense, a comprehensive integration of these theories 
becomes necessary (Darley
 et al.
2010, Quintal
 et al.
2010).
In the current study, the researcher suggests that the integration across theories can be viewed 
in terms of TCT and this view provides the basis on which to focus on the cost analysis which 
has not been fully explored in the online context. The two most widely adopted theories (TPB 
and TAM) can be explained from a different perspective in terms of a comprehensive list of 
benefits and costs. The following briefly explain how to place each of TPB and TAM in this 
context.
In the TPB, both attitudes and subjective norms can be positive or negative with respect to 
the behaviour. A positive subjective norm can be viewed as rising the costs of an alternative. 
For example, saving of effort on online shopping can be viewed as a benefit and it raises the 
cost of traditional, offline shopping. Cho (2004) argued that subjective norm toward an 
inability to physically examine the goods and concerns over delivery and return can be 
viewed as liabilities or disadvantages of online shopping, which implies an increae in the 
costs of online shopping. Measures of perceived behavioural controls (PBC) (such as site 
accessibility and transaction efficiency) represent the benefits or costs of online shopping, 

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depending on whether the measure is positively or negatively oriented, and whether a 
shopping alternative rates higher or lower on it. For example, if consumers have a high level 
of perceived control over online shopping, they would feel online shopping is easy to conduct 
and do not need to invest a lot of time and effort, thus their perceived costs would be low.
In the TAM, perceived usefuleness (PU) and perceived ease of use (PEOU) can be 
considered as benefits or costs if negatively oriented. For example, a negative perception of 
usefulness of online shopping can be viewed as a cost of online shopping while a positive 
perception can be considered as a benefit of online shopping. In a similar vein, a negative 
PEOU of online shopping increases consumers’ perception of cognitive effort of using online 
shopping system to complete online transactions, therefore can be regarded as a cost factor 
whereas a positive PEOU can alleviate consumer concerns about time and effort expended on 
online shopping, thus can be viewed as a benefit factor. 
A first-cut synthesis of these theories can be achieved through the development of a 
comprehensive list of benefits and costs, using each of the key constructs of the pertinent 
theories as a guide to identifying the nature of those benefits and costs. Although the 
evaluating and weighting benefits and costs may vary by individual, each individual is 
assumed to balance the benefits of each alternative against its costs, and choose the one with 
the lowest costs. Indeed, cost-reduction analysis is of paramount importance within the 
context of the TCT and alludes to how customers evaluate TCs when they make purchase 
decisions. The explanation that individuals choose a transaction channel with the lowest costs 
is consistent with the basic principle of TCT, which states that people would like to conduct 
transactions in the most economical way (Williamson 1985). That is, the lower the TCs, the 
more likely individuals are to conduct the transaction. Thus, in this context, this study 

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suggests as an initial approach, the integration across theories can be viewed through the lens 
of TCT. TCs, broadly construed, can contain most or all of the constructs of the other theories. 
The focus on TCT is in line with a call for additional research on consumer online behaviour 
from economic approach. TCT can help researchers gain better understanding of online 
consumer behaviour as it can be considered as a comprehensive integration of several 
theories.