E-commerce mode aggravates information asymmetry so that honesty-credit problems become more serious. This chapter discusses the honesty-credit issue and honesty-credit system construction in e-commerce. It argues that the honesty-credit issue belongs to e-commerce security problems to some extent since it also destroys information integrity, confidentiality, and availability. The study of honesty-credit issue in e-commerce will help to promote social culture development as well as improve e-commerce security. Basing on analysis of three game models, the article suggests the construction of social honesty-credit system mainly include four aspects: cultivate citizens’ sense of honesty-credit, strengthen legislation, build mechanism of third-party authentication and regulate third-party service industry. At the end of the chapter, the case of Shanghai honesty-credit system construction of is introduced to describe China honesty-credit status.
Background Definition Of Honest-Credit
The so-called honesty-credit, defined from the literal interpretation is “honest and trustworthy”. Narrow definition for the honesty-credit is the definition composition of honesty and credit, which can be interpreted as honesty and compliance with the commitments. Generalized definition of honesty-credit involves almost all of contents of “honesty” and “credit”, giving a broader and more comprehensive content to honesty-credit from the inner moral virtues to the outer behaviors of the entity. In e-commerce, honesty-credit mechanism includes honest behavior and credit system two aspects, among which, honest behaviors promise the basis and premise for various economic activities to carry out smoothly and orderly (Yu et al, 2006).
Honesty-credit as a virtue has a long history in China. The ancient people think honesty-credit is an important character for man to be a man. The Analects of Confucius and Mean as well as other famous works all refer to the concept and some also give explanations and clarifications, thinking man should consciously accept this moral constraint and try best to adhere to ethics. Honesty-credit, as a favorable moral atmosphere, has close relationship with the enterprise’s commercial reputation and value as well as personal values and moral cultivation in modern society. Which reflected to the market environment is orderly, transparent and reliable transaction relationship among trade parties. Here the essential meaning of honesty-credit contains sincerity, honesty, honoring commitments and no fraud.
Key Terms in this Chapter
Personal Trust: Refers the specific trust of some person, such as relatives, natives. Personal trust limits to a relatively small interpersonal area, and along with the expansion of transaction radius and individual flows, the costs of confidence identification and monitor rise sharply so that it must turn to system trust.
E-Commerce Honesty-Credit Problems: These problems indeed belong to e-commerce security problems caused by the lack of honesty-credit, since these problems ultimately affect the financial information and asset security in e-commerce transactions, and have no essential difference with definition of e-commerce security only except that main factors turn from network technology to the issue of honesty-credit.
E-Commerce Certification Authority (CA): Is a kind of third-party agency proving online authentication, digital certification issuance and management and other services for participants of electronic transactions.
Breach of Contract: Breach of contract referred here is a relatively broad concept, including not only the default that parties in transaction fail to fulfill their commitments but also non-compliance to provisions of contracts.
Honesty-Credit: Narrow definition for the honesty-credit is the definition composition of honesty and credit, which can be interpreted as honesty and compliance with the commitments. Generalized definition of honesty-credit involves almost all of contents of “honesty” and “credit”, giving a broader and more comprehensive content to honesty-credit from the inner moral virtues to the outer behaviors of the entity.
System trust: Means the confidence to a system composed of anonyms. The legal structure based on system trust is a kind of rule-based governance.
Credit Information Investigation System: Refers a system constituted by the credit laws and regulations, organizations, market management, culture cultivation, publicity and education which are related to credit investigation activities.