Double layers online auction trust model
In online auction trust the trust building is slightly different to e-commerce trust model. For online auction the most important is the community feedback, and forum. The online auction is a unique shopping method where there are many individuals who act as a buyer and seller in the same time. Before user decides to buy on online auction, user might see the online auctioneer company in general. In the first stage user might assessing the online auctioneer company like they assessing the e-commerce company, and decides whether the online auctioneer company is reliable or not, or can be trusted or not. Once the user decide that the online auctioneer is can be trusted, then they starting to do online shopping. In this stage user uses different variable to determines the trust level to the online auction seller.
Actually there are some researches about improving trust in online environment (e-commerce) in general, but not specifically discuss trust on online auction. In online auction reputation is one of trust variable, Brown & Morgan, 2006, in their research on eBay found that good or positive sellers’ reputation will have impact on price, while negative feedback will lead to price reduction. Reputation building is important to increase trust on seller perspective. When there are many anonymous users in online auction, it is very difficult to determine the good and bad user. One of method on measuring good user is to see their feedback record, however, sometimes seller doing the tricky way to boost their positive feedback by selling cheap items, positive feedback from seller’s buying activities will not affect the transaction (Zhang, 2006). Melnik & AL, 2005, in their research on coin’s selling through auction found that seller with positive feedback will increase the buyer’s willingness to for non-certified coins. Livingston, 2005, adds that the number of bidders will increase if seller has many positive feedbacks, and seller should abandon their identity to get the new one when they got some negative feedbacks. Another activity that can be used to increase customer trust by adding interactivity of shopping, support ease of use website, good information and communication between online auctioneer and user (Bosnjak, Obermeier, & Tuten, 2006).
Below is trust model in online auction comprises of two layers, which are trust on online auctioneer that similar to trust on e-commerce in general and then continue to trust on sellers.
Double layers online auction trust model
Online auction trust model comprises two levels of trust system.
Level 1, trust on online auctioneer company where user tends to evaluate the auctioneer company by its security, privacy, and confidentiality statement, the auctioneer reputation (image and brand), customer protection, website design whether is it easy to navigate, consist of helpful information, online tutorial, and regularly updated content. In this stage, the trust building has the same level of trust to any other e-commerce site in general.
Level 2, trust on online auction seller, since online auctioneer attract many individuals both seller and buyer. Those individual are never meet, do not know their background, where they come from, and their motive—this is become the crucial thing both for online auctioneer company and buyer. Therefore the online auctioneer builds many way to overcome trust issues, feedback system is the most method that been used, as well as reputation system, forum and testimonials, force the seller to provide information detail about them self, product information detail, and clear pricing. Those variables have a big impact on building customer trust.
Online auction trust model, online auction trust model comprises two level of trust building. Yet, online auction trust building is more complex since there are three parties who involve in the transaction—the online auctioneer who provides e-market place, seller who sell the item, and buyer. Hence, before doing transaction through online auction user should have ability to assess the online auctioneer as well as the individual who act as a seller or buyer.
References:
Bosnjak, M., Obermeier, D., Tuten, T.L. (2006). Predicting and explaining the propensity to bid in online auctions: a comparison of two action-theoretical models. Journal of Consumer Behavior, Vol. 5, pp. 102-116.
Brown, J., Morgan, J. (2006). Reputation in online auctions: the market for trust. California Management Review, Vol. 49, No.1
Livingston, J.A. (2005). How valuable is a good reputation? a sample selection model of internet auction. The review of economics and statistics, Vol. 87/3, pp.453-465
Melnik, M.I., Al, J. (2005). Seller reputation, information signals, and prices for heterogeneous coins on eBay. Southern Economic Journal, Vol 72/2, pp. 305-328.
Zhang, J. (2006). The roles of players and reputation: evidence from eBay online auction. Decision Support System, Vol. 42.