Perceived risk and trust associated with purchasing at electronic marketplaces
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Perceived risk and trust associated with purchasing at electronic marketplaces Tibert Verhagen1, Selmar Meents1 and Yao-Hua Tan1 1 Department of Information Systems and Logistics, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam, Amsterdam, The Netherlands
Correspondence: Tibert Verhagen, Department of Information Systems and Logistics, Faculty of Economics and Business Administration, Vrije Universiteit Amsterdam, De Boelelaan 1105, 1081 HV, Amsterdam, The Netherlands. Tel: þ 31 0 20 4446050; E-mail: [email protected]
Abstract Understanding consumer behaviour is of vital importance to consumeroriented e-business models today. In this paper, we study the relationships between consumer perceptions of risk and trust and the attitude towards purchasing at a consumer-to-consumer electronic marketplace (EM). Typical for EM settings is that consumer behaviour is subject to perceptions of the selling party as well as of the institutional structures of the intermediary that is operating the EM. Building upon the well-established literature of trust, we consider the concepts of intermediary trust and seller trust. We extend this categorisation by introducing the concepts of intermediary risk and seller risk. We developed measurement instruments for intermediary risk and seller risk. All measurement scales have acceptable alphas and are unidimensional. An empirical study is conducted to explore the relationships between the risk and trust types and consumer purchase attitude. The results reveal significant, direct effects of seller trust and seller risk. Second-order effects of intermediary trust and intermediary risk are investigated and reported. The paper concludes with general observations and recommendations for research and practice. European Journal of Information Systems (2006) 15, 542–555. doi:10.1057/palgrave.ejis.3000644 Keywords: electronic marketplace (EM); online purchasing; intermediary trust; intermediary risk; seller trust; seller risk
Introduction
Received: 20 December 2005 Revised: 23 July 2006 Accepted: 31 August 2006
The research objective of this paper is to explore the relationships between perceptions of risk and trust associated with purchasing from sellers at an electronic marketplace (EM) and consumer purchase attitude. Lowering the perceived risks associated with online transaction as well as maintaining transaction trust are vital keys to attracting consumers and retaining customers (Tan & Thoen, 2000, 2002). Owing to the lack of physical presence, visitors of EMs cannot experience the products by, for example, touching, feeling or smelling them. Furthermore, consumers are not able to visit the EM to reassure appropriate settlement should they be dissatisfied for any reason (e.g. payment problems, product failure). This implies that consumers depend on perceptions of the EM to assess the trustworthiness and perceived risks associated with the purchase before completing an online transaction. As opposed to ‘traditional’ consumer–seller relationships, however, i
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