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Consumer's Trust Formation Process in e-Commerce: Development of a Theoretical Framework
Abstract
Trust is a widely studied phenomenon across disciplines. For example, researchers in a context of e-commerce have conducted several studies concerning consumer's trust in e-commerce. Despite of broad interest in consumer's trust-issues, there are only few, if any studies that concentrate on mechanisms how consumers form trust toward e-commerce. Current article contributes by conceptualising consumer's trust formation process in e-commerce. Altogether four mechanisms that consumers can use to evaluate the trustworthiness of e-commerce and form trust towards it are introduced. Also the role of different consumer characteristics in consumer's trust formation process is included in the model.
... The role of different Individual characteristics in Individual's trust formation process and related constructs is important and should be investigated (Pennanen, 2005). Four Individual characteristics are explored in this study and therefore included in the model: age, gender, education level and type of work. ...
The outlook for e-commerce and e-government depends not only on individuals acceptance of internet technologies as viable transaction means, but also on the recognition of the Web as a reliable milieu. In light of this, a comprehensive model describing the factors that drive individuals to accept on-line transactions over the Web was developed and tested. This study attempts to integrate the well-established technology acceptance model (TAM) with three constructs; namely trust, credibility and risk, which are of paramount importance in predicting individual acceptance of on-line transactions.This study seeks empirical support for an extended TAM with three constructs related to e-transactions in Saudi Arabia. The structural equation modeling technique was used to evaluate the causal model and to examine the reliability and validity of the measurement model. Our findings show that each of trust, credibility and risk plays an important role toward the acceptance of on-line transactions in the Saudi settings. To view a broader picture of electronic transaction acceptance in Saudi Arabia, general Internet use with four demographic variables were also incorporated into the model. We hope this study would contribute to a better understanding of individual on-line behavior in the emerging e-commerce and e-government environments. Such understanding would enable Saudi IT policy and decision makers solve problems in moving to the digital economy and information society.Implications for management and practice of these findings are discussed to improve the acceptance of e-commerce and e-government as new technologies in Saudi Arabia.
Trust issues is still considered as a main obstacle in the implementation of eCommerce Due to the increasing numbers of cyber crimes committed today, consumers are faced with doubt to engage in online shopping. As a safety precaution, consumers will take certain measures to protect their information by evaluating and assessing these websites trustworthiness before an actual purchase occurs. This paper describes a model that examines the elements related to online consumer behavior and to investigate this behavior towards building and increasing trust. The applicability of the model was tested in attempt to view consumers' acceptance towards the model and its component. The fmdings indicate the respondents are aware of the trust issue surrounding e-Commerce implementation as they accept and agreed with the model and its components.
Trust is a crucial element to the success of e-commerce implementation. The research on the concept of trust has emerged rapidly due to the need of understanding trust in order to improve current and future e-commerce implementation. Although there are various researches conducted focusing on different aspect of trust, there are only few that provide a practical guideline to build a trusted e-commerce website. This research aims to find a practical solution on how to integrate trust during the development process of an e-commerce website and to test the constructed website in a real world situation. It will also propose a model that shows how consumer trust is developed and communicated during the engagement of consumers in e-commerce activities. This research found that there are six categories of trust mechanisms that web merchants can adopt in order to integrate trust in their website. It will provide well tested guidelines for web merchants to understand about consumer trust in order for them to design and develop a secure and trusted e-commerce website.
Channels research has consistently argued that asymmetric channel relationships are more dysfunctional than those characterized by symmetric interdependence. The authors propose that the degree of both interdependence asymmetry and total interdependence affect the level of interfirm conflict, trust, and commitment. Using survey data from automobile dealers, they demonstrate that, with increasing interdependence asymmetry, the dealer's trust in and commitment to the supplier decline while interfirm conflict increases. In addition, they demonstrate that relationships with greater total interdependence exhibit higher trust, stronger commitment, and lower conflict than relationships with lower interdependence. The effects on conflict are consistent with those predicted by bilateral deterrence theory, and the effects on trust and commitment are in accord with the authors’ bilateral convergence predictions.
Channels research has consistently argued that asymmetric channel relationships are more dysfunctional than those characterized by symmetric interdependence. The authors propose that the degree of both interdependence asymmetry and total interdependence affect the level of interfirm conflict, trust, and commitment. Using survey data from automobile dealers, they demonstrate that, with increasing interdependence asymmetry, the dealer's trust in and commitment to the supplier decline while interfirm conflict increases. In addition, they demonstrate that relationships with greater total interdependence exhibit higher trust, stronger commitment, and lower conflict than relationships with lower interdependence. The effects on conflict are consistent with those predicted by bilateral deterrence theory, and the effects on trust and commitment are in accord with the authors' bilateral convergence predictions.
The authors propose a framework for understanding key mechanisms that shape satisfaction in individual encounters, and loyalty
across ongoing exchanges. In particular, the framework draws together two distinct approaches: (1) agency theory, rooted in
the economic approach, that views relational exchanges as encounters between principals (consumers) and agents (service providers)
and (2) trust research that adopts a psychological approach toward consumer-provider relationships. In so doing, the authors
specify how trust mechanisms cooperate and compete with agency mechanisms to affect satisfaction in individual encounters
and influence loyalty in the long run. Because a multidimensional conceptualization of trust is used, the hypothesized framework
offers a fine-grained understanding of the interrelated mechanisms. The high level of specificity allows extraction of multiple
propositions, facilitates empirical testing, and encourages theoretical development of the proposed model. Several directions
to guide future research are provided.
The study reported here raises some questions about the conventional wisdom that the Internet creates a "level playing field" for large and small retailers and for retailers with and without an established reputation. In our study, consumers recognized differences in size and reputation among Internet stores, and those differences influenced their assessments of store trustworthiness and their perception of risk, as well as their willingness to patronize the store. After describing our research methods and results, we draw some implications for Internet merchants.
Numerous researchers have proposed that trust is essential for understanding interpersonal and group behavior, managerial effectiveness, economic exchange and social or political stability, yet according to a majority of these scholars, this concept has never been precisely defined. This article reviews definitions from various approaches within organizational theory, examines the consistencies and differences, and proposes that trust is based upon an underlying assumption of an implicit moral duty. This moral duty—an anomaly in much of organizational theory—has made a precise definition problematic. Trust also is examined from philosophical ethics, and a synthesis of the organizational and philosophical definitions that emphasizes an explicit sense of moral duty and is based upon accepted ethical principles of analysis is proposed. This new definition has the potential to combine research from the two fields of study in important areas of inquiry.
When a buyer perceives risk in a purchase he can pursue different strategies of risk resolution. This article presents research findings which indicate that consumers have preferences for different methods of risk reduction associated with various types of loss.
Using experimental design and conjoint analysis, this paper studies the risk perception of Singaporean consumers on Internet shopping, and tests the effectiveness of several risk-reducing strategies that Internet marketers could use in promoting online shopping among consumers. The results show that Singaporean consumers with a higher degree of risk aversion than others tend to perceive Internet shopping to be a risky activity. However, Internet marketers could rely on using reference group appeal as the most preferred risk relievers for this group of consumers, particularly by getting expert users to endorse the products involved. In addition, the marketer's reputation, the brand's image, and specific warranty strategies are also effective risk relievers for the potential Internet shoppers.
Examines the relationship between trust and participation in decision making and the cultural differences and similarities between Chinese and Australian managers. Finds that the level of trust placed by managers in th eir subordinates has a direct impact on the managers’ attitudes towards employee participation in management. States that while there is a significant difference between Australian and Chinese managers on levels of trust in employees’ psychological maturity, managers from both countries display similar trust in employees’ ability to perform their jobs.