A trust-based consumer decision-making model in electronic commerce: The role of trust, perceived risk, and their antecedents

  • Authors:

  • Dan J. Kim;Donald L. Ferrin;H. Raghav Rao

  • Affiliations:

  • Computer Information Systems, University of Houston Clear Lake, 2700 Bay Area Boulevard, Delta 169, Houston, TX 77058-1098, United States;Lee Kong Chian School of Business, Singapore Management University, Singapore;Department of Management Science and Systems, State University of New York at Buffalo, United States

  • Venue:
  • Decision Support Systems
  • Year:
  • 2008

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Abstract

Are trust and risk important in consumers' electronic commerce purchasing decisions? What are the antecedents of trust and risk in this context? How do trust and risk affect an Internet consumer's purchasing decision? To answer these questions, we i) develop a theoretical framework describing the trust-based decision-making process a consumer uses when making a purchase from a given site, ii) test the proposed model using a Structural Equation Modeling technique on Internet consumer purchasing behavior data collected via a Web survey, and iii) consider the implications of the model. The results of the study show that Internet consumers' trust and perceived risk have strong impacts on their purchasing decisions. Consumer disposition to trust, reputation, privacy concerns, security concerns, the information quality of the Website, and the company's reputation, have strong effects on Internet consumers' trust in the Website. Interestingly, the presence of a third-party seal did not strongly influence consumers' trust.