The relationship between website quality, trust and price premiums at online auctions

Abstract

This study measures the value of website quality in terms of its impact on trust, intention to transact and price premiums. Prior research on online auctions has focused on the use of reputation systems for building trust in online auction vendors and subsequently to generate price premiums. This study examines the extent to which trust can be induced by improving the quality of online auction listings. A survey of 701 eBay users is conducted which compares the price premiums of two nearly identical online auction businesses, one that has online auction listings with a perceived high quality and the other that has substantially lower perceived quality. Results of this study indicate that website quality can explain 49% of the variation in the trust for eBay sellers. In fact, it shows that sellers with good website quality are all perceived to be equally trustworthy regardless of their eBay reputation; whereas sellers with poor website quality are not perceived to be trustworthy even if they have a high eBay reputation score. The results also show that the trust resulting from increased website quality increases intention to transact and results in price premiums of 12% (on average) for sellers with higher quality listings. Theories from marketing, economics, and social psychology are used to explain why website quality induces trust in unknown vendors without providing any concrete evidence regarding the vendor's past history.

The Influence of Environmental Friendliness on Green Trust: The Mediation Effects of Green Satisfaction and Green Perceived Quality

“…In fact, even perceived quality positively affects trust [48]. Trust indicates the degree of perceived reliability or confidence that consumers have toward a person, event, object or process.…”

Mitigating risk in ecommerce transactions: perceptions of information credibility and the role of user-generated ratings in product quality and purchase intention

“…Parasuraman, A., Zeithaml, V., & Berry, L. (1996. The behavioral consequences of service quality.Journal of Marketing,60,[31][32][33][34][35][36][37][38][39][40][41][42][43][44][45][46] Rebekah Pure (MA, University of California, Santa Barbara) is a doctoral candidate in the Department of Communication at the University of California at Santa Barbara, and a survey specialist at NORC at the University of Chicago. Her research focuses on the legal implications of information technology, and specifically on privacy and trust in the social media environment.…”

“…In addition, a growing body of research has explored the relationship between product quality and purchase intention in the context of ecommerce, and found that ratings (e.g., [15,20,27,74,89]), website quality [41], and the perceived credibility of electronic word-of-mouth messages [17] all positively impact purchase decisions. Moreover, the perceived valence and credibility of product recommendations have been shown to have a significant impact on purchase intention, across a variety of consumer goods [38].…”

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“…When website quality is affirmed, an attitude of credibility/trust toward the information/source on the website can be established. [33]. Further, a well-designed website interface induces more positive emotional and cognitive evaluations of crowdfunding projects.…”