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Trust in eCommerce

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Trust: the outcome of observations leading to the belief that the action of ... Benevolence (motivation of the trustee to care and act in the truster's interest) ... – PowerPoint PPT presentation

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Title: Trust in eCommerce


1
Trust in e-Commerce
2
What is trust?
  • Trust the outcome of observations leading to the
    belief that the action of another may be relied
    upon, without explicit guarantee to achieve a
    goal in a risky situation (Elofson 2001)
  • An expectation that, and a reliance on someone or
    something to act in a specific manner, when there
    is some uncertainty regarding these actions
    (Gefen et al, 2003)
  • Willingness to be vulnerable to the actions of
    others (Mayer et al. 1995)

3
Some Properties of Trust
  • Trust is not associative (non-symmetric)
  • Trust is not transitive
  • Trust is always between exactly 2 parties
  • Trust will involve either direct trust or
    recommender trust
  • Trust is stronger than fear. Partners that trust
    each other generate greater profits, serve
    customers better and are more adaptable

4
Three trust beliefs
  • Competence (the ability of the trustee to do what
    the truster expects)
  • Benevolence (motivation of the trustee to care
    and act in the trusters interest)
  • Integrity (beliefs regarding the honesty and
    promise keeping of the trustee)
  • Predominant trust beliefs are highly correlated

5
Personality-based Trust
  • The tendency to believe or not to believe in
    others and so trust them.
  • This form of trust is based on a belief that
    others are typically well-meaning and reliable.
  • A trust credit that is given to others before
    experience can provide a more rational
    interpretation.

6
Cognition-based Trust
  • Cognition-based trust is formed via
    categorization and illusions of control.
  • Individuals place more trust in people similar to
    themselves and assess trust-worthiness based on
    second-hand information and on stereotypes.
  • In the absence of significant first-hand
    information, trust beliefs can be over-inflated.

7
Knowledge-Based Trust
  • Trust is created in the process when the
    trustors knowledge about the other party allows
    it to predict the behavior of the other party
  • (Doney et al. 1998)

8
Calculative-based Trust
  • Trust can be shaped by rational assessments of
    the cost and benefits of another party cheating
    or cooperating in the relationship (Hosmer 1995).
  • While other people may not be necessarily good,
    they are rational, calculative, act in their own
    best self-interest, and as such, will refrain
    from inflicting harm upon themselves (Shapiro et
    al. 1992)

9
Institution-based Trust
  • Structural assurances beliefs regarding the
    availability of regulations, procedures and legal
    resources to promote interaction success
  • Situational normality beliefs regarding the
    normality or favorability of the situation
  • (Gafen et al. 2003)

10
Trust in Traditional Commerce
  • Identity (brick mortar store)
  • Immediacy (physically touch the product)
  • Value (can evaluate since close at hand)
  • Discourse (talk to a salesman in person)
  • Community (words of mouth)
  • Privacy (pay cash)
  • In the traditional setting, handshaking often
    symbolizes a transaction. In the Internet
    context, it is not possible

11
Trust and Risk
  • Trust and risk are closely interrelated
  • Risk is defined as a consumers perception of the
    uncertainty and adverse consequences of engaging
    in an activity
  • When risk is present, trust is needed to make
    transactions possible
  • Doing business on the Internet has many
    additional risks

12
What Consumers Look For to Evaluate
Trustworthiness online
  • Is the site professional?
  • Does the information architecture make sense?
  • Is the site easy to navigate?
  • Is the site easy to use?
  • Are my questions answered?
  • Do other people trust this site?
  • Am I familiar with this company?
  • Are the prices reasonable?

13
Initial trust in an e-vendor
  • Individuals propensity to trust
  • Perceptions about the company (willingness to
    customize, reputation, and size)
  • Perceptions about the web site (usefulness, ease
    of use, and security control)
  • Perception of website affect perception of
    company but not the other way around
  • (Koufaris and Hampton-Sosa 2004)

14
Factors of Trust
  • Reputation and size are key factors
  • Long term reputation is far more than short-term
    product quality movements
  • Reputation and size provide assurances
  • Assurances help to increase trust, particularly
    when parties have not interacted before and do
    not have first hand knowledge of each other
  • The stores perceived reputation is positively
    associated with a consumers trust in an Internet
    store
  • The stores perceived size is positively
    associated with a consumers trust in an Internet
    store

15
Outcomes of Trust
  • Higher consumer trust toward an Internet store
    will generate more favorable attitudes towards
    shopping at that store
  • The lower the consumers perceived risk
    associated with buying from an Internet store,
    the more favorable the consumers attitudes
    towards shopping at that store
  • Favorable attitudes towards an Internet store
    will increase the consumers willingness to
    purchase from that Internet store
  • Reduced perceived risks associated with buying
    from an Internet store will increase a consumers
    willingness to purchase from that Internet store

16
Trust and technology
  • Technology can play two roles with respect to
    trust
  • Technology can mediate trust between individuals
    (Olson et al. 2000)
  • Technology can be the subject of trust (Corritor
    et al. 2003)

17
Trust Building TRA (Theory of Reasoned Action)
Model
Trust
Loyalty
Maintain Trust
Trust-based behavior
Habit threshold
Intention
Confirm Trust
Attitudes
Purchase threshold
Build Trust
Trial threshold
Beliefs
Time
18
An Online Trust Framework
19
Best Practices for E-Businesses to Increase Trust
  • Seals of Approval Re-assure the consumers that
    security has been established and privacy is
    protected
  • Brand The E-Merchants promise to deliver
    specific attributes and its credibility based on
    reputation consumers previous experience
  • Navigation Ease of finding what the consumers
    want
  • Fulfillment Clearly indicates how orders will be
    processed, and provides information on how to
    seek recourse if there are problems
  • Presentation Design attributes that exhibit
    quality and professionalism

20
Building User Confidence in EC Transactions -
WebTrust
  • The public accounting profession (AICPA CICA)
    Verisign has developed and is promoting a set of
    principles and criteria (On-Line Privacy,
    Security, Business Practices and Transaction
    Integrity, Availability, WebTrust for
    Certification Authorities)
  • CPA CA can provide assurance services to
    evaluate and test whether a particular E-Commerce
    site meets these principles and criteria
  • The WebTrust seal of assurance can be displayed
    on the E-Commerce site if it meets these
    principles and criteria
  • Example site Bell Canada

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Web References
  • Discussion Papers on e-Trust
  • Online Trust in Business-to-Business E Commerce
    (Mahadevan Venkatesh) http//unix2.iimb.ernet.in
    /mahadev/trust1.pdf
  • A Proposed Framework on Building Trust and
    Confidence in Electronic Commerce (IDA,
    Singapore) http//www.ida.gov.sg/Website/IDAhome.n
    sf/Home?OpenForm

28
Questions and Answers
  • Thanks
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