Internet Exchange and Forms of Trust

Internet Exchange and Forms of Trust

Denise Anthony (Dartmouth College, USA), James A. Kitts (Columbia University, USA), Christopher Masone (Google, USA) and Sean W. Smith (Dartmouth College, USA)
DOI: 10.4018/978-1-61520-901-9.ch016

Abstract

All economic exchange entails some uncertainty, but uncertainty is exacerbated in periods of social change that disrupt conventional patterns and modes of exchange. The increasing reliance on the Internet as a medium for exchange has greatly increased uncertainty, raising particular problems of trust between parties. This study examines how information that may reduce uncertainty affects individuals’ trust in online exchange. Within an experimental marketplace, subjects make purchase decisions with a series of simulated vendors. Subjects receive information about vendors in the form of ratings of transaction security that vary as to the source of reputation information (interpersonal vs. institutional sources) and the content of information (rating of reliability vs. capability for engaging in secure transactions). Subjects are more likely to trust vendors when given reputation information from institutional sources, but they do not differentiate capability from reliability information in evaluating vendors in this context.
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Background

Social conditions that increase uncertainty are often viewed as problems of trust. When actors depend on each other for valued outcomes, they are vulnerable to others’ choices; in these conditions, any uncertainty about others’ motives and future actions raises a fundamental dilemma of trust (Coleman, 1990; Hardin, 2002;Heimer, 2001; Luhman, 1979; Molm et al 2000). Trust is generally relevant for situations in which “participants are uncertain and vulnerable – they lack information about what others can and will do, but they also have a stake because they cannot achieve their objectives without the cooperation of others” (Heimer, 2001, p.42). According to Bacharach and Gambetta (2001), uncertainty is the primary problem of trust.

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