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Info, Comm & Ethics in Society (2005) 3: 131-141 © 2005 Troubador Publishing Ltd.

A foundation for understanding online trust in electronic commerce Beverly Kracher, Cynthia L. Corritore College of Business Administration, Creighton University, Omaha, NE 68178, USA Email: {bkracher,cindy}@creighton.edu

Susan Wiedenbeck College of Information Science & Technology, Drexel University, Philadelphia, PA 19104, USA Email: [email protected]

Trust is a key concept in business, particularly in electronic commerce (e-commerce). In order to understand online trust, one must first study trust research conducted in the offline world. The findings of such studies, dating from the 1950’s to the present, provide a foundation for online trust theory in e-commerce. This paper provides an overview of the existing trust literature from the fields of philosophy, psychology, sociology, management, and marketing. Based on these bodies of work, online trust is briefly explored. The range of topics for future research in online trust in e-commerce is presented. Keywords: Trust, e-commerce, definition of trust, antecedents of trust, offline trust vs. online trust

INTRODUCTION The use of information technology in electronic commerce (e-commerce) has created a new online environment that is highly efficient and effective, on the one hand, yet problematic on the other. A benefit of online communication is the speed at which we can transfer information, including financial records. A fundamental problem in the new electronic commerce environment is trust. Information technology can either aid its transmission or threaten its existence. Trust has been posited as the most important element of successful e-commerce (Cheskin & Sapient, 1999; Corritore, Kracher & Wiedenbeck, 2001). Evidence of its importance is reflected in the multiple trust studies being commissioned by large organizations and even governments (Canarie, Inc., 2001). While there is much agreement on the importance of trust in the online world, the formal study of it in the context of e-commerce is in its early years. However, it has been studied extensiveVOL

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ly in the brick-and-mortar, or offline, world. Trust has been a topic of research in many offline disciplines since the 1950s. The interests and needs of researchers in these various fields has led to a family of trust constructs that are multi-dimensional and various. Information technology professionals and researchers can employ offline theories of trust to understand trust and trustworthiness in the e-commerce environment. This paper begins by showing that the importance of trust in the offline world is duplicated in the online environment of e-commerce. It proceeds to survey offline trust research. Since all of the offline trust research in multiple fields would be too extensive for this paper, we will provide an overview of key works in the fields of philosophy, psychology, sociology, management, and marketing. Following the review of offline trust research, this paper briefly discusses online trust research in e-commerce. Lastly, topics for future research in online trust in e-commerce are proposed. 131

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THE VALUE OF TRUST Researchers from every discipline espouse the value of trust. Sociologists define trust as social capital, that is, a feature of social organization that makes possible coordination and cooperation between people (Misztal, 1996; Putnam, 1995). Sociologists and philosophers agree that without (authentic) trust society would not be possible (Barber, 1983; Brenkart, 1998; Flores & Solomon, 1998; Lewis & Weigert, 1985; Macy & Skvoretz, 1998). Moreover, (authentic) trust is both virtuous and intrinsically valuable (Baier, 1986; Brenkart, 1998; Flores & Solomon, 1998). Psychologists maintain that trust is a way to decrease complexity in a complex world since it allows people to reduce the number of live options in situations (Barber, 1983). Psychologists and philosophers agree that trust is vital for personality development and the development of intimate relationships (Johnson-George & Swap, 1982; Kee & Knox, 1970; Koehn, 1996; Rotter, 1971). In the business world, management scholars have shown that trust is a predictor of workplace satisfaction (Driscoll, 1978). It enables people to live in risky and uncertain situations (Mayer, Davis & Schoorman, 1995). As workplace compositions and organizational structures change, trust can reduce the fear attached to these changes (Hwang & Burgers, 1997; Mayer et al. 1995). Marketing researchers have demonstrated that trust leads to long-term exchange relationships which are important in today's world of relationship marketing (Ganesan, 1994). In terms of economics, trust has economic value since exchange would not occur without it (Koehn, 1996). Trust can also be used as a form of control in contrast to price and authority (Creed & Miles, 1996) and can reduce transaction costs (Wicks, Berman & Jones, 1999). Additionally, trust appears to be one of three mechanisms for achieving a degree of cooperation in economic behavior (Bradrach & Eccles, 1989; Powell, 1990). Basically, there is widespread agreement that trust is essential for a variety of human experiences, including business. It is reasonable to assume that the importance of trust in the offline world is duplicated in the online environment of e-commerce. The e-commerce environment has many features in common with the offline environment. For example, economic exchange occurs online as it does in the offline environment. It is likely that economic exchange on the Internet would not occur without trust, as in the offline environment. Similarly, trust likely reduces risk, fear, and costs online. Trust probably also contributes to online cooperation and is vital for 132

online exchange relationships. Trust is social capital, online as well as offline. It is likely that without trust, successful e-commerce is not possible. While this has not been empirically demonstrated at this time either in the literature or in this paper, this discussion will proceed based on the truth of this premise.

OFFLINE TRUST Successful e-commerce requires trust. An understanding of online trust in e-commerce can be developed based on the work done in offline trust research.

Definitions and Types of Offline Trust In this section, definitions of trust, and types and levels of trust will be presented as given by the fields of philosophy, sociology, psychology, and management. Only these fields were included as researchers from other fields such as communications and economics tend to use trust research from this body of work. Philosophy In the field of philosophy, Baier (1986) is the grandmother of trust, or more precisely, entrusting. Her focus is interpersonal trust, though in the field of philosophy trust is studied at all levels including personal, organizational and social. Philosophers tend to focus on understanding the meaning and types of trust, and by doing so, distinguish trust from other concepts such as trustworthiness, agreement, confidence, cooperation, and reliance (Solomon & Flores, 2001; Soule, 1998). A primary definitional question for philosophers is whether trust is a moral concept. There is general agreement that trust can be moral or not (Baier, 1986; Koehn, 1996, Solomon & Flores, 2001). Baier distinguishes moral and immoral interpersonal trust: trust that would stand the inspection of each other’s motives and trust that would not. Baier even proposes a test for moral trust “where each party can communicate why they are acting like they are and the knowledge does not damage the relationship” (p. 259). Koehn (1996) proposes a similar dialogical test for moral trust where trustors and trustees are willing to openly dialog about each other’s intentions and interests. Baier defines (moral) trust as a three-way predicate between the trustor, the trustee and the object that is entrusted. Trust is “accepted vulnerability to INFORMATION, COMMUNICATION

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another’s possible but not expected good will toward oneself” (1986, p. 235). It includes “letting other persons take care of something the truster cares about” (1986, p. 240). While philosophers generally agree with Baier that trust includes vulnerability and a perception that the other is trustworthy, they disagree on whether trust is a type of behavior, a belief or some other kind of psychology state. Brenkert (1998) shows how Baier’s definition is an example of Voluntarism since it defines trust as a willingness or volition to engage in trust. He distinguishes this kind of definition from Predictability trust and Attitudinal trust where trust is defined, respectively, as a cognitive state (a prediction), or an attitude or disposition to behave. Not only is there not one agreed upon definition of trust in the philosophy literature, but several taxonomies of trust have also been proposed. One of the most basic is Baier’s (1986) previously discussed distinction between moral and immoral trust. In addition, trust is classified as that which is consciously chosen versus an unconscious trust (Baier, 1986; Koehn, 1996). Brenkert (1998) divides attitudinal trust into basic trust (underlying, a precondition of social life), guarded trust (temporary, invoking explicit contracts to protect vulnerabilities) and extended trust (lacking in explicit contracts and dependent on the values of participants). Another taxonomy is extended by Flores and Solomon (1998), who distinguish simple trust (naïve – devoid of distrust), blind trust (stubborn, self-deluding), basic trust (sense of security), authentic trust (trust that is reflected on and understood) and articulate trust (trust articulated in belief). While simple trust is given in a situation, authentic and articulate trust are created over time and in relationships. Sociology The trust research conducted in the field of sociology is very diverse, lacking a central paradigm or model (Luhmann, 1988). However, generally all sociological research defines trust in terms of social relationships (Barber, 1983; Good, 1988) and maintains that it is a deep assumption for modern society (Dasgupta, 1988; Giddens, 1990; Good, 1988; Macy & Skvoretz, 1998). Trust is seen as a complex property that is held by individuals, social relationships, and social systems, making it hard to capture and study. Some see it as social capital, used to improve efficiency of society by facilitating coordinated actions (Misztal, 1996). Others, such as Snijders and Keren (1999) and Macy and Skvoretz (1998) have studied trust in the context of games and define it implicitly as cooperation. Most agree that it is easy to confuse trust with other concepts VOL

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due to its complexity and situational dependence. These other concepts include faith, honesty, loyalty, sincerity, altruism, and confidence (Good, 1988; Lewis & Weigert, 1985; Macy & Skvoretz, 1998). There is little agreement in sociological research on a definition of trust. Some definitions center on the trustors belief that the results of the trustees actions will be appropriate from their point of view and that the trustee has the freedom to disappoint them. A key element in this definition is that these beliefs must be in the context of a situation in which the trustee has control over relevant circumstances (Giddens, 1990; Macy & Skvoretz, 1998). This definition highlights the elements of belief, control, situational context, expectations and a future orientation. In this definition, one can rely on another to act as expected; this definition relies on the confidence that underlying social rules and conventions will be followed (Dasgupta, 1988). Lewis and Weigert (1985) add that trust is associated with the unfamiliar, not the familiar. Similarly, Giddens (1990) suggests that trust implies incomplete knowledge, either about some domain or related to an incomplete ability to monitor the trustee’s behavior and motivations. Other definitions focus on trust as an attitude that allows for risk-taking decisions in social contexts based again on confidence that others will respond as expected (Lewis & Weigert, 1985, Misztal, 1996). The focus here is the element of risk. Good (1988) viewed trust as being composed of three elements: cognitive, emotional, and behavioral. In contrast, sociological game theorists tend to view trust as a rational process, and propose that cooperation in a two-person gaming situation defines trust (Barber, 1983; Seligman, 1998). Many sociologists have postulated that there are different types of trust. Generally there is a distinction between a type of personal, or face to face trust versus trust in some type of societal structure (Barber, 1983; Giddens, 1990; Good, 1988). Generally these social structures are presented as abstract systems such as money. According to Dasgupta (1988) trust in abstract systems is a hallmark of modern society. However, this type of trust is somewhat unfulfilling as it lacks an emotional element, something that humans require (Dasgupta, 1988; Good, 1988). In one of the most widely supported theories of trust, Barber (1983) proposes three types of trust: continuity of natural order, technical competence of actors in roles, and fiduciary obligations of actors. Continuity of natural order allows one to take for granted many features of everyday life. For example, you trust that your job will be waiting in the same state 133

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tomorrow. This dimension addresses the need of people to reduce complexity through the use of trust. Technical competence is evidenced by ones trust in another who has knowledge one does not possess, such as trusting a surgeon to perform surgery. Fiduciary obligation amounts to trusting another to put, in certain situations, other people’s interests before their own. This is a strong expectation of professionals, and modern society is increasingly dependent on such behavior. Psychology Like sociologists, psychologists generally agree that trust is a critical concept and that it is understudied. Trust research in the field of psychology embodies a large variety of approaches to defining and examining trust with little interaction between the approaches. In fact, Lewicki and Bunker (1995) maintain that existing psychological theories about trust are simplistic and fragmented, with little effort being made to integrate them. Like sociology, the work in psychology sometimes confuses trust with other states such as cooperation, faith, confidence, altruism, competence, and benevolence (Lewicki & Bunker, 1995). While psychologist have not agreed upon one definition of trust or even upon common elements of trust, they do agree that trust is very difficult to define because it applies to a wide range of relationships, varies from context to context, and is multi-dimensional (Deutsch, 1958; Kee & Knox, 1970; Lewicki & Bunker, 1995; Rotter, 1980). Rotter (1971), an early researcher of trust, defined trust as an expectancy held by individuals or groups that the word, promise, verbal or written statement of another can be relied on. The verbal and written elements were included to emphasize the role of communication in trust, particularly in learning situations. This definition is still heavily employed. Other researchers have focused on an element of risk and vulnerability when defining trust, with abuse of trust leading to penalties (Johnson-George & Swap, 1982). Early trust researcher and game theorist Deutsch (1960) concentrated on the element of motives and motivation in trust relationships. Yet others include in their definitions of trust an affective element as well as an element of confidence in others motives (Deutsch, 1958; Deutsch, 1960; Lewicki & Bunker, 1995; Schumm, Bugaighis, Buckler, Green, & Scanton, 1985; Rotter, 1980). Psychology researchers also have identified a number of different types of trust. One of the first was given by Deutsch (1958, 1962) who identified two types of trust: interpersonal and mutual. In 134

interpersonal trust, the trustee may not know he/she is being trusted and so may be more likely to violate the trust. Conversely, in mutual trust, both sides are aware of each other's trust and intent. Most subsequent researchers have primarily examined mutual trust. In the most widely cited model of trust, Shapiro, Sheppard, and Cheraskin (1992) proposed three types of trust in business relationships: calculative (deterrence based), knowledgebased (have enough information to predict behavior), and identification-based (internalized others desires and intentions). Lewicki and Bunker (1995) extended this model by treating the three types of trust as phases that are linked, sequential, interactive, and evolve over time. In this model the initial calculative phase is characterized by a deterrencebased trust, based on calculated punishments and rewards. Trust is ensured through repeated interactions, increasing the degree of interdependence over time that decreases the alternative relationships to which one might turn if trust is violated. The ability to ‘hold’ the other’s reputation as hostage against violation of trust is also characteristic of this phase. Next one moves to the knowledgebased phase, which is founded on information and embracing differences that are identified. Last is the identification phase, which is the ‘highest level’. In this phase, the goals, needs, and outlooks of both parties become shared in common and internalized. It is a state of collective identity. In other work, Rempel, Holmes, and Zanna (1985) propose a hierarchical stage model of trust, which defines three stages in the development of trust: predictability, dependability, and faith. Finally, Zajonc (1980) looks at trust from a different angle. He maintains that trust has three aspects: cognitive, perceptual, and affective. He suggests that the affective aspect may dominate social interactions and perceptions, thus affecting trusting behavior. Management Similar to the philosophers and sociologists, the assumption by management theorists is that individual people, organizations, and systems can be trusted. Organizational theorists tend to think about trust at either the micro level (interpersonal, for example, trust in workgroups) or meso level (organizational, for example, trust exhibited by an organization) (Hosmer, 1995). Strategists discuss trust towards various stakeholders (Wicks et. al., 1999), inter-organizational trust (Dodgson, 1993) or trust in strategic alliances (Das & Teng, 1998). Recently, Handy (1995) has discussed trust in virtual organizations and Meyerson, Weick and Kramer (1996) have focused on trust in temporary systems. INFORMATION, COMMUNICATION

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Three definitions of trust are typically used in the management literature. One is Mayer’s et al. definition of dyadic trust: “the willingness to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor or control that other party” (Mayer et al., 1995, p. 172). Baba (1999), Bhattacharya, Devinney and Pillutla (1998), and Wicks et al. (1999) use Hosmer’s definition of trust, namely, “the expectation by one... of ethically justifiable behavior... on the part of another person... in a joint endeavor” (Hosmer, 1995, p. 399). Hosmer, unlike the philosophers, assumes that trust is essentially a moral concept. Last is the definition given by Sabel (1993) and used by Barney and Hansen where trust is defined as “the mutual confidence that no party to an exchange will exploit another's vulnerabilities” (Barney & Hansen, 1994, p. 176). Management scholars have created taxonomies of trust for the different objects of trust, often using categories from outside the field to describe trust. For example, Fox (1974) uses Fukuyama’s (1995) high and low trust to understand institutional trust. At the micro (interpersonal) level of trust Baba (1999), al la Barber (1983) distinguishes general trust (about the natural and moral social order) from specific trust (in particular contexts). Specific trust is either competence trust (role performance) or fiduciary trust (good will – advancing ones interest over another’s). Competence trust is acquired cognitively and fiduciary trust is acquired through the emotions. At the meso (organizational) level of trust, Dodgson (1993), per Sako (1992) distinguishes between competence, good will (fiduciary), and contractual trust. Especially relevant to the online virtual environment is Meyerson et al. (1996) distinction between swift and slow trust. They show how virtual workgroups must have swift trust, that is, the kind of trust that is created quickly and then disappears rapidly. How swift and slow trust apply in the online environment in general is a matter for further research.

Offline Trust Antecedents Much study has been conducted to determine the antecedents of trust in the offline world. However, once again this body of work is relatively diverse, due in part to the narrow focus each field typically has taken in examining trust in the context of their field’s conceptualizations. In this section we will focus on research conducted in the fields of VOL

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sociology, psychology, management, and marketing as they serve as a foundation for work in other fields. Work done in philosophy will not be considered due to limited space and the fact that much of the work done on trust in philosophy is definitional. Sociology Several antecedents to trust have been identified in the sociological literature. Some researchers postulate that there is a personal disposition to trust or personal characteristics that strongly impact the trust decision. Several propose that some people are simply more prone to trust (Dasgupta, 1988; Snijders & Keren, 1999). Others maintain that social perceptions and the ability to read others’ intentions and inclinations play a key role in making a decision to trust (Macy & Skvoretz, 1998; Seligman, 1998). Other factors include the stakes involved and their importance to those involved (Barber, 1983; Seligman, 1998; Snijders & Keren, 1999). Additionally, a bias in the interpretation of social events and a cognitive inertia to preserve trust have been shown to impact trust behavior (Giddens, 1990). People tend to seek confirming information and discount disconfirming information. Other researchers have identified numerous general concepts as important to the decision to trust and in the maintenance of existing trust. One of these, experience, is widely supported as important in the establishment of trust. Trust requires time to build as it requires information about past behavior, goals, importance of goals and stakes, and reputation in order that one can better predict another’s actions and motivations and hence make a decision to trust (Barber, 1983; Giddens, 1990; Good, 1988; Luhmann, 1988; Misztal, 1996; Seligman, 1998). The element of expectation has also been posited as a central antecedent to the trust experience. This refers to expectations about the ability of the trustee to carry out an action (technically, emotionally, materially), the expectation of reciprocity and expectations about what to do if trust is violated (Barber, 1983; Buskens, 1998; Good, 1988; Macy & Skvoretz, 1998). Many also agree that situational context, that is, the variability of trust depending on the situation, is an important antecedent of trust (Barber, 1983; Buskens, 1998; Good, 1998; Lewis & Weigert, 1985; Macy & Skvoretz, 1998). Trust is also seen to have a futuristic orientation, as it reflects ones prediction about the future behavior of another. Trust revolves around decisions between alternatives and possible future behaviors 135

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(Luhmann, 1988; Macy & Skvoretz, 1998). Additionally, trust appears to be facilitated by the amount of communication between subjects. The greater the degree of communication, the greater the chance of a mutually beneficial outcome and subsequent trust (Barber, 1983). Lastly, some believe that trust cannot exist in the absence of an element of risk (Dasgupta, 1988; Good, 1988; Lewis & Weigert, 1985; Macy & Skvoretz, 1998; Seligman, 1998). Buskens (1998) also maintains that the threat of credible punishment for violation of trust is a pertinent antecedent to a trusting relationship, particularly in relationships that involve transactions. Psychology Psychological trust research has primarily focused on examining the characteristics or elements that lead to a decision to trust. Several of the elements affecting the decision to trust rely on the ability of the trustor to evaluate aspects of the trustee. Most important is the ability to predict behavior and perceive the trustee’s intentions and motivations through cues (Deutsch, 1958; Lewicki & Bunker, 1995; Rotter, 1980). Deutsch, an early trust theorist, focused on the effect of motivation of the trustee and trustor, which he termed motivational relevance. He identified three orientations – cooperative, individualistic, and competitive – that affect the likelihood to trust. Experience is another important element that impacts the trustor's ability to evaluate and predict behavior on the part of the trustee (Deutsch, 1958; Lewicki & Bunker, 1995; Rotter, 1967). Experience also creates expectations, such as expectations of a sense of obligation on the part of trustees to fulfill trust (Deutsch, 1958) and that others can be believed in general, which is developed in infancy (Rotter, 1971). Similarly, a feeling of confidence that the trustee has the ability, means, and intention to carry out some action, as well as the confidence one has in ones own predictions are elements that are considered important to making a decision to trust (Deutsch, 1958; Lewicki & Bunker, 1995). Lastly, according to Deutsch (1958, 1962) and Kee and Knox (1970) psychological simultaneity, that is, the degree to which both parties know what the other is doing, is important in deciding to trust another. The presence of this element was hypothesized to promote trust as it made behavioral predictions easier to make. Kee and Knox (1970) propose three factors that affect the decision to trust: previous experience with the trustee, structural and situational factors (i.e. incentives, communication, and characteristics of the trustee) and dispositional factors (i.e. motivational orientation, personality, attitudes). Like the 136

sociologists, many psychologists also recognize that trust is situationally dependent (Lewicki & Bunker, 1995) and contains a futuristic orientation. The psychological research also points to an element of retaliation as present in trust scenarios, and likewise absolution when inevitably trust is violated (Deutsch, 1958). The use of mixed-motive games such as the Prisoners Dilemma have been used by psychologists to study trust in a variety of controlled situations. Game theorists have thus identified several additional factors that appear to play a role in the decision to trust. Deutsch (1958) found that communication appears to promote trust. An element of control has also been identified as a factor in trust. That is, if one can control another’s behavior, then there is little need for trust (Deutsch, 1958, 1962). Therefore, lack of control colors the decision to trust. Beliefs of the trustor are also important. A trustor is more likely to trust if he/she perceives the trustee had little to gain from untrustworthy behavior, if the trustor perceives that he/she could exert some control over the trustees behavior, and if the two are positively oriented to each others welfare (Deutsch, 1958, 1962). They also proposed that trust was not the same as gullible, and in fact found the two to be negatively related (Deutsch, 1958, 1962; Rotter, 1980). Management Management literature is replete with the causes of trust. Some researchers specifically discuss the causes of particular types of trust. For example, repeated interaction (Shapiro et al., 1992) and the alignment of interests (Bhattacharya et al., 1998) are seen as causes of deterrence-based trust. Predictability (Shapiro et al., 1992) and choosing partners wisely (Bhattacharya et al., 1998) are extended as causes of knowledge-based trust. Shared identity (Bhattacharya et al., 1998), and increased perceived similarities (Creed & Miles, 1996) are proposed as causes of identification-based trust. Other researchers focus on causes of trust in general. These include a discussion of cognitive cues that indicate a trustee's integrity, competence, loyalty, consistency and openness (Baba, 1999; Sheppard & Sherman, 1998; Whitney, 1994). Similarly, Mayer et al., (1995) argue that trust involves a belief that the other has ability, benevolence and integrity. Others report that reliability and fairness play a role in trust (Whitney, 1994). Dodgson (1993) focuses on good relationships and effective communication as causes of trust. Marketing Marketing researchers have been active in the INFORMATION, COMMUNICATION

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search for the antecedents of trust in marketing relationships. For example, a buyer’s trust in a vendor organization appears to be increased by a reputation for reliable, consistent, and fair behavior (Ganesan, 1994). Trust has also been shown to be increased by a perception that a vendor organization has made investments on the buyer’s behalf, e.g. customization of products (Doney & Cannon, 1997; Ganesan, 1994). Large vendor organization size has also been observed to positively effect trust by sending a signal that many other firms trust the vendor (Doney & Cannon, 1997). Morgan and Hunt (1994) maintain that trust is increased by high communication and shared values between the vendor and buying firms. The buyer’s past experience with the vendor organization was identified as a significant antecedent of trust in an early study (Anderson & Weitz, 1989), but later research has not found a significant relationship (Doney & Cannon, 1997; Ganesan, 1994). Ganesan speculates that trust develops more from actual events and behaviors in a buyer-seller relationship than from the longevity of the relationship. Much marketing research has investigated the role of the salesperson in establishing trust in relationship marketing. Doney and Cannon (1997) found that the expertise and likeability of the salesperson, the similarity of the salesperson to members of the buying firm, and the frequency of the business contacts between the salesperson and the buyer had a significant effect on the buyer’s trust. Swan and Trawick (1987) similarly found expertise, or competence, and likeability to be important in evoking trust, as well as dependability, honesty, and customer orientation. In the same manner, Morgan and Hunt (1994) note that trust is decreased by perceptions of opportunistic behavior by an exchange partner.

ONLINE TRUST IN E-COMMERCE In the last 15 years, trust research has been carried out in ergonomics (for example, Lee & Moray, 1992; Muir & Moray, 1996) human-computer interaction literature (for example, Fogg & Tseng, 1999; Kim & Moon, 1997; Lee, Kim & Moon, 2000; Nass, Moon, Fogg, Reeves & Dryer, 1997) and management information literature (for example, Ba & Pavlou, 2002; Huotari & Livonen, 2004; Jarvenpaa, Knoll & Leidner, 1998; Morris, Marshall & Rainer, 2003; Staples & Ratnasingham, 1998). In this section we focus on online trust in e-commerce. Offline trust research provides a rich foundation VOL

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for online trust research in e-commerce. As in other fields, in e-commerce, trust and trustworthiness are two sides of the same coin. Taking trustworthiness first, it is notable that the e-commerce literature focuses on cues of trustworthiness to the same degree as the management and marketing literature. Managers and marketers discuss how competence, consistency, openness, ability, benevolence, integrity, reliability, reputation, fairness, among other factors, must be prominently exhibited by businesses in order to bring customers to them. Ebusinesses operationalize these concepts for the ecommerce arena. The groundbreaking Cheskin/Sapient report (1999), for example, discusses the six building blocks of trustworthiness, namely, seals of approval, branding, fulfillment, navigation, presentation, and technology. These cues are grounded in offline research. For example, seals of approval and branding can be seen as operationalizing integrity and reputation. New ideas from marketing and management literature can constantly be examined as well in order to ensure that what must be operationalized for the sake of online trustworthiness is included. With regards to trustworthiness, third party authentication seals are now typical ways for ecommerce sites to demonstrate their trustworthiness. The Seal of Trust, WebTrust, VeriSign and Truste are all examples of authentication seals. Security on a site is also a cue of trustworthiness (Marcella, 1999). Security can occur in the form of authorization, authentication and privacy statements. Other signs that websites are trustworthy are its professionalism, architecture, navigation, easy of use, whether or not questions are answered, and whether it is recommended by others (Sisson, 1999). The sociology and psychology literature educates e-commerce researchers on the complexity of trust. A trustee must be trustworthy but external antecedents as well as internal, personal factors of the trustor must be tapped in order for trust to occur. Kee and Knox (1970) call external antecedents “structural and situational factors", and use ”dispositional factors" as a name for internal, personal factors. Sociology and psychology literature is also useful for evaluating the online trust models that have emerged. For example, the sociology and psychology literature shows us that Egger’s (2000) MoTEC model, an early online trust model, is more complete than the Cheskin/Sapient report (1999). MoTEC includes not only interface property and information trustworthiness cues but also relationship management (structural) and preinteractional filter (dispositional factors) compo137

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nents. Yet, while several structural factors have been addressed in Egger’s online trust model situational factors deserve more exposure. Both sociologists and psychologists discuss the importance of situational context and the impact of risk, lack of control, and treatment of punishment on trust. These concepts must be brought more robustly into the e-commerce arena in order to come to a better understanding of online trust in e-commerce.

RESEARCH DIRECTIONS FOR ONLINE TRUST IN E-COMMERCE Offline trust literature can greatly aid e-commerce researchers and practitioners. The more they can continue to explore offline trust literature the more robust their taxonomies, definitions, and models can be.

Taxonomy While online trust research is similar to offline trust in several ways, it is different in one important way. Online trust includes discussions about whether technology itself is a proper object of trust (Marcella, 1999). Solomon and Flores (2001) argue that people trust other people, not machines. Others assume that people can trust computers (Reeves & Nass, 1996) and even websites. In a sense, the website becomes the salesperson (Javenpaa & Tractinsky, 1999). Thus, one avenue of future research is the classification and investigation of the several possible objects of online trust in e-commerce. First, consumers can trust the underlying technology infrastructure and control mechanisms that allow communication and transactions between consumers and vendors. These include the Internet technology itself as well as technological security safeguards and protection mechanisms, such as digital signatures and encryption mechanisms. This kind of online trust is called technology trust and has become a focus of research (Lee & Turban, 2001; Ratnasingam & Pavlov, 2003). Since this is a baseline trust in the technological infrastructure of ecommerce, this kind of trust may be required for consumers to attempt online purchasing. Second, consumers can trust the firms with which they interact via the Internet. In this case, technology is a means or conduit for the trust between them. This kind of online trust is called computer-mediated trust and has been the longest object of online trust study (Jarvenpaa & Tractinsky, 1999; Koehn, 2003; Olson & Olson, 2000). This kind of trust is as 138

important for e-commerce as offline consumer trust in a firm is for brick-and-mortar business. Third, consumers can trust a firm’s website itself regardless of whether or not they trust the firm. This kind of online trust is called website trust because trust is placed in the website which represents or stands for a firm. Indeed, because of this representative relationship between the website and the firm some researchers take website trust to be a dimension of computer-mediated trust. They posit that a website is akin to a salesperson or business storefront and interaction with it can enhance formation of a consumer’s trust in a business (Jarvenpaa & Tractinsky, 1999; McKnight, Choudhury & Kacmar, 2002). However, the trust a consumer can have in a website is conceptually distinct from the trust a consumer can have in a firm, and online marketers must manage both. In fact, website trust has recently become an aspect of online trust research (Corbitt, Thanasankit & Yi, 2003; Corritore, Marble, Kracher & Wiedenbeck, 2005).

Definitional Issues for Online Trust in E-Commerce Definitional investigations of online trust should include an extensive analysis of the applicability of levels and types of trust discussed in the offline literature to the e-commerce environment. For example, Fukuyama's distinction between high and low trust societies can likely be applied to the e-commerce arena. It would be useful to investigate whether the e-commerce environment is a high or low trust environment in general and whether it fluctuates. How we try to create or maintain online trust may very well depend on the height of trust at a certain time. Also, dialogical trust, as discussed in the philosophy literature, seems to be at the root of communication management in trust situations. Due to the interactivity of the Internet, the role of dialogical trust might be an essential ingredient of at least some types of online trust in e-commerce. Another relevant aspect of offline trust is Barber’s (1983) contrast between general and specific trust. This is akin to the philosopher's distinction between, respectively, basic trust and guarded or extended trust. In the online environment, general or basic trust can be placed in the online environment itself while specific guarded or extended trust can be placed in particular websites, particular characteristics about a website, or the company behind the website. Certain trust features are repeatedly identified in the offline literature and so should be included in a INFORMATION, COMMUNICATION

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definition of online trust. These include confidence, risk, expectation, and vulnerability. These features can be used to build a definition of online trust in e-commerce.

Antecedents of Online Trust in E-Commerce Ultimately, a goal of developing models is to be able to operationalize online trust so that it can be studied and used to guide e-commerce. Here, internal antecedents of online trust deserve further exploration. For example, the cognitive, emotive, and behavioral components of trust discussed in sociology and psychology must be thoroughly analyzed and their specific roles in online trust identified. However, psychological factors of trustors are difficult to study or potentially affect. Thus it is not surprising that the focus in e-commerce research to date has been on external factors. But while information technology specialists can go a long ways towards ensuring trust in e-commerce by creating technologies that are trustworthy, internal factors must also be elucidated. The various models by Bhattacherjee (2002), Corritore, Kracher and Wiedenbeck (2003), Gefen, Karahanna and Straub (2003), Jarvenpaa and Tractinsky (1999) and McKnight et al. (2002) are only a few frameworks through which an understanding of the complexity of antecedents of online trust can be explored. But regardless of which model is accepted, we must use the body of work on offline trust as a foundation for building a strong and accurate understanding of online trust in e-commerce.

ACKNOWLEDGEMENTS We are indebted to the Joe Rickett Center in Electronic Commerce and Database Marketing, College of Business Administration, Creighton University, Omaha, Nebraska, for its financial support of this research project.

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