Internet Exchange and Forms of Trust

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. In this study, we examine how information that may reduce uncertainty affects individuals' trust in online exchange. Within an experimental marketplace, we present subjects with a series of simulated vendors along with ratings of the vendors' transaction security. Specifically, we manipulate the source of reputation information (interpersonal vs. institutional sources) and the content of information (rating of reliability vs. capability for engaging in secure transactions) for those vendors, then assess subjects' tendency to trust in vendors. We find that although subjects are responsive to the item price and vendor rating, and subjects are more likely to trust vendors when given reputation information from institutional sources, they do not differentiate capability from reliability information in evaluating vendors in this context.

Divine exchanges: Applying social exchange theory to religious behavior

“…Trust is defined as 'expectations that an exchange partner will behave benignly, based on the attribution of positive dispositions and intention to the partner in a situation of uncertainty and risk' (Molm et al, 2000(Molm et al, : 1402. Trust emerges as a reaction to uncertainty and risk (Blau, 1964;Cook, 2005;Heimer, 2001;Molm et al, 2000Molm et al, , 2009, where individuals are willing to make themselves vulnerable to their exchange partner's behavior because they expect that their partner will reciprocate accordingly (Anthony et al, 2010;Coleman, 1990;Hardin, 2002). Trust has been suggested to be a key facilitator of exchanges, since it can mitigate the risk and uncertainty involved (Anthony et al, 2009;Buchan et al, 2002;Kollock, 1994;Molm, 1994;Molm et al, 2000Molm et al, , 2009.…”

“…Good quality uncertainty, as its name suggests, refers to when an actor is uncertain about the quality of the desired good. Examples of goods of uncertain quality include rubber (the quality is unable to be determined at the time of sale) (Kollock, 1994), used cars (Akerlof, 1970), and goods sold online, whose quality cannot be determined until they are received after being purchased (Anthony et al, 2010; Pavlou et al, 2007). Seller quality uncertainty refers to not knowing the seller’s true characteristics and her future behavior, whether she will renege on the exchange either by not providing the good at all or by providing a lower quality good than promised (Kollock, 1994; Lawler et al, 2000; Molm, 1994; Pavlou et al, 2007).…”

“…All social exchanges-interactions between two or more individuals where valued goods are exchanged-involve some degree of uncertainty, although the amount depends on the conditions of the exchange (Molm et al, 2000(Molm et al, , 2009. Uncertainty-the inability to predict the probability of certain outcomes-may arise due to the unverifiable quality of the good exchanged or the indeterminable 'quality' of the exchange partner, that is, not knowing her future behavior-whether or not she will reciprocate once an actor contributes to the exchange (Anthony et al, 2010;Kollock, 1994;Lawler et al, 2000;Molm, 1994;Molm et al, 2000;Pavlou et al, 2007). Uncertainty reduces an individual's likelihood of participating in an exchange because he is unable to predict the quality of the good promised or even whether he will receive the good at all.…”

States, social capital and cooperation: looking back on 'Governing the Commons'

“…In turn, the relationships between manufacturers and long term suppliers were more likely to lead to cooperation than the relationships with shortterm suppliers. Information about a partner's past reliability increases the likelihood of successful cooperation (Dawes 1980;Raub and Weesie 1990;Burt and Knez 1996;Anthony et al 2010).…”