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Initial trust formation in the electronic used market

Sang Jun Lee, University of Nebraska - Lincoln


Arguably, the most critical time frame for unknown participants in the electronic market to develop trust is at the beginning of their relationship. The increasing transactions of used products in the business-to-customer electronic market and the growing number of unknown Internet-based retailers call for a special attention to building customer trust at the initial stage when both parties meet in the retailer's website. The main purpose of this study is to develop a model of initial trust formation in the electronic used market that provides design guidelines for the Internet-based retailer, which will enable customers to willingly purchase products from the retailer although they have no interaction history. ^ The theoretical basis of the study is based on previous research demonstrating the influence of trust in one party on the attitude and behavior of another party. The study hypothesized that initial trust would be positively related to assurance, reputation, and customer relationship management reflected in the store website. For assurance management, two different types of third-party assurance seals were used: one for assuring the store and the other for assuring the used product. For reputation and customer relationship management, a buyer feedback system was used. A laboratory experiment was conducted with 121 participants at a major U.S. state university. Most participants were undergraduate students in business related majors. ^ The results showed that the assurance services are positively related to initial trust toward the store and the used product, and reputation and effectively managed complaints in the buyer feedback system significantly affect building the customer's initial trust. Most interestingly, the damaged reputation due to negative evaluations from previous customers could be sufficiently recovered by effective complaint management reflected in a buyer feedback system. ^

Subject Area

Business Administration, Marketing|Business Administration, Management|Information Science

Recommended Citation

Lee, Sang Jun, "Initial trust formation in the electronic used market" (2002). ETD collection for University of Nebraska - Lincoln. AAI3074087.