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Perceived risk and trust associated with purchasing at Electronic Marketplaces

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Author Info
Verhagen, Tibert (Vrije Universiteit Amsterdam, Faculteit der Economische Wetenschappen en Econometrie (Free University Amsterdam, Faculty of Economics Sciences, Business Administration and Economitrics)
Meents, Selmar
Tan, Yao-Hua
Abstract

Understanding consumer behaviour is of vital importance to consumer oriented e-business models today. In this paper we study the relationships between consumer perceptions of risk and trust and the attitude towards purchasing at a consumer-to-consumer electronic marketplace. Typical for electronic marketplace settings is that consumer behaviour is subject to perceptions of the selling party as well as the institutional structures of the intermediary that is operating the electronic marketplace. Building upon the well-established literature of trust we consider the concepts of institutional trust and party trust. We extend this categorization by introducing the concepts of institutional risk and party risk. We developed measurement instruments for institutional risk and party risk. All measurement scales have acceptable alphas and are unidimensional. An empirical study is conducted to explore the relationships between the risk and trust types and consumer purchase attitude. The results reveal significant, direct effects of party trust and party risk. Second order effects of institutional trust and institutional risk are investigated and reported. The paper concludes with general observations and recommendations for research and practice.

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Paper provided by Free University Amsterdam, Faculty of Economics, Business Administration and Econometrics in its series Serie Research Memoranda with number 0001.

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Date of creation: 2006
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Handle: RePEc:dgr:vuarem:2006-1

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Web page: http://www.econ.vu.nl

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Related research
Keywords: Consumer behaviour e-Commerce

Find related papers by JEL classification:
M31 - Business Administration and Business Economics; Marketing; Accounting - - Marketing and Advertising - - - Marketing

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Petty, Richard E & Cacioppo, John T & Schumann, David, 1983. "Central and Peripheral Routes to Advertising Effectiveness: The Moderating Role of Involvement," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 10(2), pages 135-46, September.
  2. K. Jöreskog, 1971. "Statistical analysis of sets of congeneric tests," Psychometrika, Springer, vol. 36(2), pages 109-133, June. [Downloadable!] (restricted)
  3. Jones, Michael A. & Reynolds, Kristy E. & Weun, Seungoog & Beatty, Sharon E., 2003. "The product-specific nature of impulse buying tendency," Journal of Business Research, Elsevier, vol. 56(7), pages 505-511, July. [Downloadable!] (restricted)
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