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Lemons on the web: a signalling approach to the problem of trust in Internet commerce
journal contribution
posted on 2005-10-01, 00:00 authored by B-C Lee, L Ang, Chris DubelaarChris DubelaarAsymmetric 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 moneyback
guarantee, branding, and privacy statement, and test their efficacy. Our empirical results
confirm the predictions suggested by signalling theory.
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 moneyback
guarantee, branding, and privacy statement, and test their efficacy. Our empirical results
confirm the predictions suggested by signalling theory.
History
Journal
Journal of economic psychologyVolume
26Issue
5Pagination
607 - 623Publisher
ElsevierLocation
Amsterdam, The NetherlandsPublisher DOI
ISSN
0167-4870Language
engPublication classification
C1.1 Refereed article in a scholarly journal; C Journal articleCopyright notice
2005, ElsevierUsage metrics
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