An Empirical Investigation of the Role of Trust and Power in Shaping the Use of Electronic Markets

Abstract

This chapter discusses the role that social relational characteristics, such as trust and power, play in shaping the use of a particular type of e-business application—electronic markets (EM)—to support exchange relationships with suppliers that exhibit predominantly transactional characteristics. The analysis is based on a case study of an EM in the electricity sector. The study finds that the EM is used to take advantage of a superior power position, in order to achieve cost reductions, breeding mistrust and eroding the suppliers’ bargaining power. The findings support the argument that social relational characteristics, such as trust and power, are significant factors in shaping the use of EM in transactional-oriented relationships.