Institution-based trust is a buyer's perception that effective third-party institutional mechanisms are in place to facilitate transaction success. This paper integrates sociological and economic theories about institution-based trust to propose that the perceived effectiveness of three IT-enabled institutional mechanisms-specifically feedback mechanisms, third-party escrow services, and credit card guarantees-engender buyer trust in the community of online auction sellers. Trust in the marketplace intermediary that provides the overarching institutional context also builds buyer's trust in the community of sellers. In addition, buyers' trust in the community of sellers (as a group) facilitates online transactions by reducing perceived risk. Data collected from 274 buyers in Amazon's online auction marketplace provide support for the proposed structural model. Longitudinal data collected a year later show that transaction intentions are correlated with actual and self-reported buyer behavior. The study shows that the perceived effectiveness of institutional mechanisms encompasses both "weak" (market-driven) and "strong" (legally binding) mechanisms. These mechanisms engender trust, not only in a few reputable sellers, but also in the entire community of sellers, which contributes to an effective online marketplace. The results thus help explain why, despite the inherent uncertainty that arises when buyers and sellers are separated in time and in space, online marketplaces are proliferating. Implications for theory are discussed, and suggestions for future research on improving IT-enabled trust-building mechanisms are suggested.

Building Effective Online Marketplaces with Institution-Based Trust.

https://aisel.aisnet.org/cgi/viewcontent.cgi?article=1155&context=icis2002

Building Effective Online Marketplaces with Institution-Based Trust

This paper reviews the empirical evidence of the effect of credibility of the message source on persuasion over a span of 5 decades, primarily to come up with recommendations for practitioners as to when to use a high- or a low-credibility source and secondarily to identify areas for future research. The main effect studies of source credibility on persuasion seem to indicate the superiority of a high-credibility source over a low-credibility one. Interaction effect studies, however, show source credibility to be a liability under certain conditions. The variables found to interact with source credibility are categorized into 5 categories: source, message, channel, receiver, and destination variables. The most heavily researched variables have been the message and receiver variables. Implications for marketers/advertisers and suggestions for future research are discussed.

The Persuasiveness of Source Credibility: A Critical Review of Five Decades' Evidence

The influence of online product recommendations on consumers' online choices

Use of celebrities as part of marketing communications strategy is a fairly common practice for major firms in supporting corporate or brand imagery. Firms invest significant monies in juxtaposing brands and organisations with endorser qualities such as attractiveness, likeability, and trustworthiness. They trust that these qualities operate in a transferable way, and, will generate desirable campaign outcomes. But, at times, celebrity qualities may be inappropriate, irrelevant, and undesirable. Thus, a major question is: how can companies select and retain the 'right' celebrity among many competing alternatives, and, simultaneously manage this resource, while avoiding potential pitfalls? This paper seeks to explore variables, which may be considered in any celebrity selection process by drawing together strands from various literature.

Celebrity Endorsement: A Literature Review

The purpose of this study was to develop a scale for measuring celebrity endorsers' perceived expertise, trustworthiness, and attractiveness. Accepted psychometric scale-development procedures were followed which rigorously tested a large pool of items for their reliability and validity. Using two exploratory and two confirmatory samples, the current research developed a 15-item semantic differential scale to measure perceived expertise, trustworthiness, and attractiveness. The scale was validated using respondents' self-reported measures of intention to purchase and perception of quality for the products being tested. The resulting scale demonstrated high reliability and validity.

https://www.jstor.org/stable/pdfplus/4188769.pdf

Construction and Validation of a Scale to Measure Celebrity Endorsers' Perceived Expertise, Trustworthiness, and Attractiveness

The impact of celebrity spokespersons' perceived image on consumers' intention to purchase.

Purchasing involvement and recreational shopping are two consumer characteristics associated with active shopping and information-seeking. This study examines how these characteristics influence consumers shopping effort and consumers importance ratings of department store attributes. Significant differences are found among highly involved consumers, minimally involved, consumers, and recreational shoppers and between groups of consumers classified on the basis of these two characteristics. Public policy and research implications are discussed.

/pdf/consumers-shopping-effort-and-evaluation-of-store-image-44xesysp6c.pdf

Consumers Shopping Effort And Evaluation Of Store Image Attributes: The Roles Of Purchasing Involvement And Recreational Shopping Interest

This paper reviews the endorsement advertising and source credibility literature to identify factors which make this type of advertising effective. These credibility factors resemble the legal conc...

Source Credibility, Legal Liability, and the Law of Endorsements:

/pdf/recent-trends-in-the-law-of-endorsement-advertising-4m4ui85t24.pdf

Roobina Ohanian

Papers

Construction and Validation of a Scale to Measure Celebrity Endorsers' Perceived Expertise, Trustworthiness, and Attractiveness

The impact of celebrity spokespersons' perceived image on consumers' intention to purchase.

Consumers Shopping Effort And Evaluation Of Store Image Attributes: The Roles Of Purchasing Involvement And Recreational Shopping Interest

Source Credibility, Legal Liability, and the Law of Endorsements:

Recent Trends in the Law of Endorsement Advertising: Infomercials, Celebrity Endorsers and Nontraditional Defendants in Deceptive Advertising Cases