Trust in eCommerce

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Trust in e-Commerce
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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)

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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

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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

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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.

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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.

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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)

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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)

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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)

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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

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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

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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?

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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)

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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

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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

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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)

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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
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An Online Trust Framework
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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

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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

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Questions and Answers

• Thanks