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Journal Article

E-commerce: the role of familiarity and trust

David Gefen1
01 Jan 2000-Management Science-
TL;DR: In this paper, Luhmann et al. found that familiarity is a precondition for trust, and trust is a prerequisite of social behavior, especially regarding important decisions, in the context of the E-commerce involved in inquiring about and purchasing books on the Internet.
Abstract: Familiarity is a precondition for trust, claims Luhmann [28: Luhmann N. Trust and power. Chichester UK: Wiley, 1979. (translation from German)], and trust is a prerequisite of social behavior, especially regarding important decisions. This study examines this intriguing idea in the context of the E-commerce involved in inquiring about and purchasing books on the Internet. Survey data from 217 potential users support and extend this hypothesis. The data show that both familiarity with an Internet vendor and its processes and trust in the vendor influenced the respondents’ intentions to inquire about books, and their intentions to purchase them. Additionally, the data show that while familiarity indeed builds trust, it is primarily people’s disposition to trust that affected their trust in the vendor. Implications for research and practice are discussed.
Citations
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Journal ArticleDOI
TL;DR: Research on experienced repeat online shoppers shows that consumer trust is as important to online commerce as the widely accepted TAM use-antecedents, perceived usefulness and perceived ease of use, and provides evidence that online trust is built through a belief that the vendor has nothing to gain by cheating.
Abstract: A separate and distinct interaction with both the actual e-vendor and with its IT Web site interface is at the heart of online shopping Previous research has established, accordingly, that online purchase intentions are the product of both consumer assessments of the IT itself-specifically its perceived usefulness and ease-of-use (TAM)-and trust in the e-vendor But these perspectives have been examined independently by IS researchers Integrating these two perspectives and examining the factors that build online trust in an environment that lacks the typical human interaction that often leads to trust in other circumstances advances our understanding of these constructs and their linkages to behavior Our research on experienced repeat online shoppers shows that consumer trust is as important to online commerce as the widely accepted TAM use-antecedents, perceived usefulness and perceived ease of use Together these variable sets explain a considerable proportion of variance in intended behavior The study also provides evidence that online trust is built through (1) a belief that the vendor has nothing to gain by cheating, (2) a belief that there are safety mechanisms built into the Web site, and (3) by having a typical interface, (4) one that is, moreover, easy to use

6,853 citations

Journal ArticleDOI
TL;DR: The proposed model integrates trust and perceived risk, which are incorporated given the implicit uncertainty of the e-commerce environment, and is justified by placing all the variables under the nomological TRA structure and proposing their interrelationships.
Abstract: This paper aims to predict consumer acceptance of e-commerce by proposing a set of key drivers for engaging consumers in on-line transactions. The primary constructs for capturing consumer acceptance of e-commerce are intention to transact and on-line transaction behavior. Following the theory of reasoned action (TRA) as applied to a technology-driven environment, technology acceptance model (TAM) variables (perceived usefulness and ease of use) are posited as key drivers of e-commerce acceptance. The practical utility of TAM stems from the fact that e-commerce is technology-driven. The proposed model integrates trust and perceived risk, which are incorporated given the implicit uncertainty of the e-commerce environment. The proposed integration of the hypothesized independent variables is justified by placing all the variables under the nomological TRA structure and proposing their interrelationships. The resulting research model is tested using data from two empirical studies. The first, exploratory study comprises three experiential scenarios with 103 students. The second, confirmatory study uses a sample of 155 on-line consumers. Both studies strongly support the e-commerce acceptance model by validating the proposed hypotheses. The paper discusses the implications for e-commerce theory, research, and practice, and makes several suggestions for future research.

4,639 citations


Cites background from "E-commerce: the role of familiarity..."

  • ...Consumers tend to assume that a trusted Web retailer will not engage in opportunistic behavior [39]....

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  • ...Gefen showed that trust is instrumental in the acceptance of Internet technologies [39]....

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  • ...Trust can be described as the belief that the other party will behave in a socially responsible manner, and, by so doing, will fulfill the trusting party’s expectations without taking advantage of its vulnerabilities [39, 59]....

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Journal ArticleDOI
TL;DR: This paper contributes by proposing and validating measures for a multidisciplinary, multidimensional model of trust in e-commerce, which shows that trust is indeed a multiddimensional concept.
Abstract: Evidence suggests that consumers often hesitate to transact with Web-based vendors because of uncertainty about vendor behavior or the perceived risk of having personal information stolen by hackers. Trust plays a central role in helping consumers overcome perceptions of risk and insecurity. Trust makes consumers comfortable sharing personal information, making purchases, and acting on Web vendor advice--behaviors essential to widespread adoption of e-commerce. Therefore, trust is critical to both researchers and practitioners. Prior research on e-commerce trust has used diverse, incomplete, and inconsistent definitions of trust, making it difficult to compare results across studies. This paper contributes by proposing and validating measures for a multidisciplinary, multidimensional model of trust in e-commerce. The model includes four high-level constructs--disposition to trust, institution-based trust, trusting beliefs, and trusting intentions--which are further delineated into 16 measurable, literature-grounded subconstructs. The psychometric properties of the measures are demonstrated through use of a hypothetical, legal advice Web site. The results show that trust is indeed a multidimensional concept. Proposed relationships among the trust constructs are tested (for internal nomological validity), as are relationships between the trust constructs and three other e-commerce constructs (for external nomological validity)--Web experience, personal innovativeness, and Web site quality. Suggestions for future research as well as implications for practice are discussed.

4,526 citations

Journal ArticleDOI
01 Jan 2008
TL;DR: A theoretical framework describing the trust-based decision-making process a consumer uses when making a purchase from a given site is developed and the proposed model is tested using a Structural Equation Modeling technique on Internet consumer purchasing behavior data collected via a Web survey.
Abstract: Are trust and risk important in consumers' electronic commerce purchasing decisions? What are the antecedents of trust and risk in this context? How do trust and risk affect an Internet consumer's purchasing decision? To answer these questions, we i) develop a theoretical framework describing the trust-based decision-making process a consumer uses when making a purchase from a given site, ii) test the proposed model using a Structural Equation Modeling technique on Internet consumer purchasing behavior data collected via a Web survey, and iii) consider the implications of the model. The results of the study show that Internet consumers' trust and perceived risk have strong impacts on their purchasing decisions. Consumer disposition to trust, reputation, privacy concerns, security concerns, the information quality of the Website, and the company's reputation, have strong effects on Internet consumers' trust in the Website. Interestingly, the presence of a third-party seal did not strongly influence consumers' trust.

2,650 citations


Cites background or result from "E-commerce: the role of familiarity..."

  • ...708 [50,61,78,107] Familiarity (FAM) Reflective 4....

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  • ...Some research has reported that familiarity reduces a consumer's perceived risk, interface complexity or uncertainty because it simplifies the relationship with a selling party [61,92,91]....

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  • ...com) would reduce uncertainly and complexity through an understanding of how to search and purchase items through the site and what the transaction procedure involved is based on previous interactions and experiences [61]....

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  • ...Finally, a consumer's familiarity with a selling party through frequent interactions may directly affect the consumer's willingness to purchase [61]....

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  • ...A consumer's disposition to trust is a general inclination to display faith in humanity and to adopt a trusting stance toward others [61]....

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Proceedings Article
01 Jan 2002
TL;DR: In this article, the authors integrate sociological and economic theories about institution-based trust to propose that the perceived effectiveness of three IT-enabled institutional mechanisms-specifically feedback mechanisms, third-party escrow services, and credit card guarantees-engender buyer trust in the community of online auction sellers.
Abstract: Institution-based trust is a buyer's perception that effective third-party institutional mechanisms are in place to facilitate transaction success. This paper integrates sociological and economic theories about institution-based trust to propose that the perceived effectiveness of three IT-enabled institutional mechanisms-specifically feedback mechanisms, third-party escrow services, and credit card guarantees-engender buyer trust in the community of online auction sellers. Trust in the marketplace intermediary that provides the overarching institutional context also builds buyer's trust in the community of sellers. In addition, buyers' trust in the community of sellers (as a group) facilitates online transactions by reducing perceived risk. Data collected from 274 buyers in Amazon's online auction marketplace provide support for the proposed structural model. Longitudinal data collected a year later show that transaction intentions are correlated with actual and self-reported buyer behavior. The study shows that the perceived effectiveness of institutional mechanisms encompasses both "weak" (market-driven) and "strong" (legally binding) mechanisms. These mechanisms engender trust, not only in a few reputable sellers, but also in the entire community of sellers, which contributes to an effective online marketplace. The results thus help explain why, despite the inherent uncertainty that arises when buyers and sellers are separated in time and in space, online marketplaces are proliferating. Implications for theory are discussed, and suggestions for future research on improving IT-enabled trust-building mechanisms are suggested.

2,044 citations

References
More filters
Journal ArticleDOI
TL;DR: Relationship marketing, established, developing, and maintaining successful relational exchanges, constitutes a major shift in marketing theory and practice as mentioned in this paper, after conceptualizing relationship relationships as a set of relationships.
Abstract: Relationship marketing—establishing, developing, and maintaining successful relational exchanges—constitutes a major shift in marketing theory and practice. After conceptualizing relationship marke...

19,920 citations


"E-commerce: the role of familiarity..." refers background or methods in this paper

  • ...Trust encourages long-term orientation [10,12,33], increases the acceptance of interdependence [39,43], and creates commitment [32,33,43]....

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  • ...Trust also reduces perceived risk [10,33], can reduce transaction costs when warranted [10,42], and is to some extent important in almost any contractual agreement because of possible opportunistic behavior of the other party [42]....

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  • ...Finally, items re ̄ecting respondent trust in the vendor, and items re ̄ecting a general disposition to trust were created based on the description of the meaning of these in the literature [31,33]....

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Journal ArticleDOI
TL;DR: The Economic Institutions of Capitalism as mentioned in this paper is a seminal work in the field of economic institutions of capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.
Abstract: (1987). The Economic Institutions of Capitalism. Journal of Economic Issues: Vol. 21, No. 1, pp. 528-530.

16,767 citations

Journal ArticleDOI
TL;DR: In this paper, a definition of trust and a model of its antecedents and outcomes are presented, which integrate research from multiple disciplines and differentiate trust from similar constructs, and several research propositions based on the model are presented.
Abstract: Scholars in various disciplines have considered the causes, nature, and effects of trust. Prior approaches to studying trust are considered, including characteristics of the trustor, the trustee, and the role of risk. A definition of trust and a model of its antecedents and outcomes are presented, which integrate research from multiple disciplines and differentiate trust from similar constructs. Several research propositions based on the model are presented.

16,559 citations

Book
01 Jan 1964
TL;DR: In a seminal work as discussed by the authors, Peter M. Blau used concepts of exchange, reciprocity, imbalance, and power to examine social life and to derive the more complex processes in social structure from the simpler ones.
Abstract: In his landmark study of exchange and power in social life, Peter M. Blau contributes to an understanding of social structure by analyzing the social processes that govern the relations between individuals and groups. The basic question that Blau considers is: How does social life become organized into increasingly complex structures of associations among humans. This analysis, first published in 1964, represents a pioneering contribution to the sociological literature. Blau uses concepts of exchange, reciprocity, imbalance, and power to examine social life and to derive the more complex processes in social structure from the simpler ones. The principles of reciprocity and imbalance are used to derive such processes as power, changes in group structure; and the two major forces that govern the dynamics of complex social structures: the legitimization of organizing authority of increasing scope and the emergence of oppositions along different lines producing conflict and change.

16,278 citations

Journal ArticleDOI
TL;DR: This transmutability of the validation matrix argues for the comparisons within the heteromethod block as the most generally relevant validation data, and illustrates the potential interchangeability of trait and method components.
Abstract: Content Memory (Learning Ability) As Comprehension 82 Vocabulary Cs .30 ( ) .23 .31 ( ) .31 .31 .35 ( ) .29 .48 .35 .38 ( ) .30 .40 .47 .58 .48 ( ) As judged against these latter values, comprehension (.48) and vocabulary (.47), but not memory (.31), show some specific validity. This transmutability of the validation matrix argues for the comparisons within the heteromethod block as the most generally relevant validation data, and illustrates the potential interchangeability of trait and method components. Some of the correlations in Chi's (1937) prodigious study of halo effect in ratings are appropriate to a multitrait-multimethod matrix in which each rater might be regarded as representing a different method. While the published report does not make these available in detail because it employs averaged values, it is apparent from a comparison of his Tables IV and VIII that the ratings generally failed to meet the requirement that ratings of the same trait by different raters should correlate higher than ratings of different traits by the same rater. Validity is shown to the extent that of the correlations in the heteromethod block, those in the validity diagonal are higher than the average heteromethod-heterotrait values. A conspicuously unsuccessful multitrait-multimethod matrix is provided by Campbell (1953, 1956) for rating of the leadership behavior of officers by themselves and by their subordinates. Only one of 11 variables (Recognition Behavior) met the requirement of providing a validity diagonal value higher than any of the heterotrait-heteromethod values, that validity being .29. For none of the variables were the validities higher than heterotrait-monomethod values. A study of attitudes toward authority and nonauthority figures by Burwen and Campbell (1957) contains a complex multitrait-multimethod matrix, one symmetrical excerpt from which is shown in Table 6. Method variance was strong for most of the procedures in this study. Where validity was found, it was primarily at the level of validity diagonal values higher than heterotrait-heteromethod values. As illustrated in Table 6, attitude toward father showed this kind of validity, as did attitude toward peers to a lesser degree. Attitude toward boss showed no validity. There was no evidence of a generalized attitude toward authority which would include father and boss, although such values as the VALIDATION BY THE MULTITRAIT-MULTIMETHOD MATRIX

15,795 citations


"E-commerce: the role of familiarity..." refers methods in this paper

  • ...The discriminant and convergent validity of the scales were then examined using the MTMM method, based on [40] and [7]....

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