Lemons on the Web: A signalling approach to the problem of trust in Internet commerce

by: Boon-Chye Lee, Lawrence Ang, Chris Dubelaar

Journal of Economic Psychology, Vol. 26, No. 5. (October 2005), pp. 607-623.

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Abstract

Asymmetric information is at the heart of situations involving trust. In the case of B2C Internet commerce, the information asymmetry typically relates to the difficulty that consumers have of distinguishing between "trustworthy" and "untrustworthy" Web merchants. The impasse can be resolved by the use of signals by trustworthy Web merchants to differentiate themselves from untrustworthy ones. Using an experimental design where subjects are exposed to a series of purchase choices, we investigate three possible signals, an unconditional money-back guarantee, branding, and privacy statement, and test their efficacy. Our empirical results confirm the predictions suggested by signalling theory.

@article{citeulike:313687, abstract = {Asymmetric information is at the heart of situations involving trust. In the case of B2C Internet commerce, the information asymmetry typically relates to the difficulty that consumers have of distinguishing between "trustworthy" and "untrustworthy" Web merchants. The impasse can be resolved by the use of signals by trustworthy Web merchants to differentiate themselves from untrustworthy ones. Using an experimental design where subjects are exposed to a series of purchase choices, we investigate three possible signals, an unconditional money-back guarantee, branding, and privacy statement, and test their efficacy. Our empirical results confirm the predictions suggested by signalling theory.}, author = {Lee, Boon-Chye and Ang, Lawrence and Dubelaar, Chris }, citeulike-article-id = {313687}, doi = {10.1016/j.joep.2005.01.001}, journal = {Journal of Economic Psychology}, keywords = {commerce, internet, signaling, trust, web}, month = {October}, number = {5}, pages = {607--623}, posted-at = {2005-09-08 10:00:06}, priority = {2}, title = {Lemons on the Web: A signalling approach to the problem of trust in Internet commerce}, url = {http://dx.doi.org/10.1016/j.joep.2005.01.001}, volume = {26}, year = {2005} }

RIS record

TY - JOUR ID - citeulike:313687 L3 - citeulike-article-id:313687 TI - Lemons on the Web: A signalling approach to the problem of trust in Internet commerce JF - Journal of Economic Psychology VL - 26 IS - 5 SP - 607 EP - 623 N2 - Asymmetric information is at the heart of situations involving trust. In the case of B2C Internet commerce, the information asymmetry typically relates to the difficulty that consumers have of distinguishing between "trustworthy" and "untrustworthy" Web merchants. The impasse can be resolved by the use of signals by trustworthy Web merchants to differentiate themselves from untrustworthy ones. Using an experimental design where subjects are exposed to a series of purchase choices, we investigate three possible signals, an unconditional money-back guarantee, branding, and privacy statement, and test their efficacy. Our empirical results confirm the predictions suggested by signalling theory. KW - commerce KW - internet KW - signaling KW - trust KW - web AU - Lee, Boon-Chye AU - Ang, Lawrence AU - Dubelaar, Chris PY - 2005/10// UR - http://dx.doi.org/10.1016/j.joep.2005.01.001 ER -

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