Management of Trust in the E-Marketplace: The Role of the Buyer's Experience in Building Trust

Abstract

The e-marketplace, or broker-managed online market, is one of today's most profitable e-business models. In these marketplaces, buyers routinely engage with businesses and individual sellers with whom they have had little or no prior interaction, making trust one of the most important issues in the e-marketplaces. Therefore, a clear understanding of the trust building process in the e-marketplace is important for the success in the market. In this study, we analyze the process by which e-marketplace customers develop trust in both a market-maker and sellers. Additionally, this analysis provides a theoretical framework to identify the antecedents of trust. In the framework, we suggest that the impact of trust on transaction intention is moderated by the customer's previous experiences in the e-marketplace. The theoretical model presented here was tested on survey and transaction data collected from 692 respondents. The results indicate that customers value the importance of trust in the market-maker and sellers differentially by the level of transaction experience. It is also shown that market-maker's characteristics (reputation, website's usability and security) and seller's characteristics (expertise) play an important role in the formation and development of trust toward a market-maker and sellers, respectively.