Trust is a major issue that baffles C2C development as more than half of the offline-only consumers do not purchase online because of their distrust of the digital channel (the website of Analysys, 2008). Some C2C sellers post fake product pictures taken from magazines or other websites and send buyers inferior knockoff products. An informal survey by Sina.com revealed that more than 70% of the respondents had bought fake products online and worried about making purchases on C2C websites in the future (the website of Sina, 2009).
In e-commerce, trust has been long recognized as a critical success factor, and much research has been conducted on trust (Gefen and Straub 2004；Kim and Benbasat, 2003； Lee and Turban, 2001). Trust is ‘‘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 or control that other party” (Mayer, Schoorman, and Davis 1995). Researchers have also agreed that trust is multidimensional, and the most cited three dimensions of trust are ability, integrity, and benevolence (Gefen and Straub, 2004). Ability is the skills or competencies that allow a trustee to be perceived competent in a specific area.
Integrity is the expectation that the trustee will act in accordance with social norms or principles that the trustor accepts. Benevolence is that the trustee will care about and be kind to the trustor. This study aggregates a number of scholars on the definition of trust as Table 2-2.
TABLE 2-2: Definition of trust
Morgan and Hunt 1994 Honest and reliable faith in exchange partners.
Hosmer 1995 A group in the expected performance of each other will be based on their own interests, regardless of whether the supervision or control of each other's behavior, willing to bear the risk of injury.
Doney and Cannon 1997 Trustworthiness and Credibility that a truster feel to trustees.
Rousseau et al. 1998 It is a mental state of a nuisance intention, based on a
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positive expectation of the intention or behavior of others.
McLain and Hackman 1999 In the case of a specific party, he is willing and willing to act in the best interests of the trust.
Gefen 2000 Individuals based on past interaction with others, the future of others will be consistent with their preferences and expectations of holding the confidence.
Nicholson et al 2001 Trust has confidence in the dependence and honesty of others.
Sirdeshmukh et al 2002 The customer's hold of the service provider is dependent and can depend on the expectation of delivering its promise.
Rauyruen and Miller 2007 That there are two levels of trust, one is the customer believes that the organization of a sales staff, and second, customers believe that the whole organization.
Amblee and Bui 2011 Consumers who have a positive relationship with an online vendor tend to develop a perception
of high switching costs, which may lead to the formation of long-term commitment and loyalty to the online vendor.
Wang, Wang and Liu 2016 Trust is an inseparable critical factor for the forming and maintaining business relationships between exchange parties.
Source: Wang, Wang and Liu (2016)
The perceived benefit in this study refers to the subjective perception of the potential positive value of a consumer's online transaction to a C2C platform. The relationship between trust and benefit is a subject of research on business relationships and organizational trust. Research and evidence show that there is a positive relationship between trust and various benefits. For example, trust can lead to higher productivity and profitability (Doney and Cannon, 1997；Morgan and Hunt, 1994), reduced transaction costs within the organization, spontaneous sociality, and appropriate respect for the organization (Kramer, 1999) related to trading partners (Ratnasingham, 2002).
Yet, these benefits can be realized only if the C2C e-commerce can be trusted to fulfill its obligations. A consumer who has a high level of trust in a selling party will by definition have confidence that the C2C e-commerce retailer will fulfill its obligations, and therefore can have greater confidence that the potential benefits of purchasing online will be realized. High trust in a C2C e-commerce platform should cause a consumer to develop a relatively high level of perceived benefit. In contrast, if a consumer has a relatively low level of trust in the selling party, he or she is unlikely to expect the C2C e-commerce retailer to fulfill its obligations, and therefore it is likely to realize a relatively low level of perceived benefit.
There are many factors that affect trust. Walczuch, Lundgren and Henriette (2004) found three main factors influencing customer trust in e-commerce: (1) Experience-based factors: it means customers’ past shopping experience, including duration of experience and communication of intention (2) Perception-based factors: it means customers’ impression on the website, such as reputation, similarity, normality, familiarity. (3) Knowledge-based factors: it means that customers’ understanding of technology would affect their trust.
Zucker (1986) suggests that institutional trust is the most important mode by which trust is created in an inhuman economic environment without familiarity and similarity (communality). She describes two dimensions of institutional trust. Firstly, third party certification, such as licenses, regulations, and laws, that define a party’s trustworthiness and expected behavior; Secondly, escrows which guarantee the expected outcome of a
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transaction. Zucker’s institutional view of trust has been widely adopted by e-commerce researchers, perhaps because e-commerce brings together a large number of parties with no familiarity and cultural similarities. Mayer et al.
(1995) proposed institution-based trust mechanism to build the basic trust needed to engage in social transactions with unfamiliar objects through social systems. Doney and Cannon (1997) also puts forward the logic of trust. When the buyer does not easily get information about the seller from the market, the trust can be established through institutional mechanisms such as verification or trading of transaction compliance services.
McKnight and Chervany (2002) proposed institution-based trust as a belief that the Internet has legal or regulatory protections for consumers. They define institutional trust as the “subjective belief with which organizational members collectively assess that advantageous conditions are in place that are conducive to transaction success”. Basically, institution-based trust implies a belief of impersonal structures is in place to support the success of transaction.
Collected data from 274 buyers in Amazon’s online auction marketplace, Pavlou and Gefen (2004) integrated sociological and economic theories with regard to institutional trust to propose that the perceived effectiveness of three institution-based trust-enabled institutional mechanisms: specially feedback mechanisms, third-party escrow services, and credit card guarantees, generate buyer trust in the community of online auction sellers.
According to them, effective institutional trust mechanism is composed of both powerful (legally binding) mechanism and weak (market-driving) mechanism, For example, laws and regulations, authorizations, escrow
services, feedback systems, cooperative norms, etc. This study suggested that C2C e-Commerce platforms can enhance the functional development of the IBT-enable mechanism which was based on McKnight et al. (1998) and Gefen et al. (2003). And institutional mechanisms in e-commerce have emerged in various forms in recent years (Fang et al., 2014), including escrow services, online credit card guarantees, and privacy protection. The mechanism was classified into “institution-based structural assurances” and “institution-based situational normality”. According to Taiwan C2C e-commerce ecosystem, the
“institution-based structural assurances” includes "payment guarantee mechanism", "third party certification mark", and platform-driven "C2C transaction guarantee mechanism". The “institution-based situational normality” includes Pavlou and Gefen (2004) proposed “supervision mechanism of information intermediaries."
Online shopping is still considered a risky proposition despite its utilitarian and hedonic values (Chiu et al., 2014), to attract potential buyers and turn infrequent buyers into frequent ones, online sellers should deliver various guarantees (e.g. security, privacy and order fulfilment). Pavlou and Gefen (2005) suggested that e-Commerce institution-based mechanisms offer appropriate conditions for the success of online transactions, which can protect a buyer from fraud, speculative behavior or other illegal activities of sellers in a transaction platform. The consumer's transfer of trust from the four-type IBT mechanism will affect its trust in the seller's online store (Stewat, 2003), while reducing the perceived risk of their transactions (Pavlou and Gefen, 2004).
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