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A Trust-Based Model of Consumer-to-Consumer Online Auctions

A Trust-Based Model of Consumer-to-Consumer Online Auctions. Dr. Harold Pardue S chool of Business and Economics. Overview. What phenomenon am I studying? The role of trust in web-based online consumer-to-consumer auctions How will I study it? Online reserve price auction

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A Trust-Based Model of Consumer-to-Consumer Online Auctions

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  1. A Trust-Based Model of Consumer-to-Consumer Online Auctions Dr. Harold Pardue School of Business and Economics

  2. Overview • What phenomenon am I studying? • The role of trust in web-based online consumer-to-consumer auctions • How will I study it? • Online reserve price auction • http://sbe.d.umn.edu/sbexchange • Controlled experiments • Why am I studying it? • Trust is an important factor in creating successful virtual e-communities • Integrates research, teaching, and service • Fun!

  3. Online Auctions • Classification • Business-to-business, business-to-consumer, consumer-to-consumer • I’m focusing on consumer-to-consumer auctions • Economic value • Auctions allow the market to determine the value of goods and services • Entertainment value • Like a giant flea market • Thrill of “winning” an auction

  4. Online Auctions • Growth area • $52.6 billion by 2002 • Nearly 2,000 online auction sites • eBay • Brings together 5.6 million diverse users with over 3.3 million items. • eBay illustrates the need for fostering trust • Can’t assume common values or backgrounds • Very few control and monitoring mechanisms • Internet Fraud

  5. Trust • The willingness of a party to be vulnerable to the actions of another party based on the expectation that the other will perform a particular action important to the trustor, irrespective of the ability to monitor and control that other party • Key literature sources • Mayer, R. C., Davis, J. H. and F. D. Schoorman, (1995) • Joseph Rotter (1967)

  6. Research Model

  7. Research Hypotheses • H1:Increases in perceived trustworthiness of the trustee are associated with increases in the trustor’s willingness to trust. • H2: Increases in propensity to trust are associated with increases in the trustor’s willingness to trust. • H3: Increases in perceived risk are associated with increases in the trustor’s willingness to post a bid. • H4: Increases in perceived value are associated with increases in the trustor’s willingness to post a bid.

  8. sbExchange • Online reserve price auction • Provides a venue for auctions • Payment and delivery independent of site • UMD students, faculty, and staff • Sell used textbook, bicycles, music CDs, and computer equipment

  9. Research Design • Monitor “live” system • Conduct controlled laboratory experiments • Procedures • Subjects • Task • Experimental setting

  10. Schedule • Fall term 1999 • Develop and pilot Internet trust scale • Pilot task and environment • Spring 2000 • Conduct experiments • Analyze data • Summer 2000 • Write up results • Submit for publication

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