To ease this anxiety, an online customer may be quite willing to pay a higher markup to an Internet retailer in return for a smaller temporal gap between order payment and order receipt (Cao and Zhao, 2004). This provides the opportunity for an Internet retailer to proactively manage customer expectations about PDS, promising a superior PDS performance in order to extract a larger premium in executing the sales transaction (Smith et al., 2000). This leads us to posit that there is a positive relationship between PDS performance promises and margins in transactions between Internet retailers and customers.