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Abstract

The objective of this paper is to provide a theoretically grounded framework for trust in electronic environments, e-trust. Throughout the paper, e-trust is considered as the willingness of an electronic agent (i.e. the trustor) to rely on an electronic provider (i.e. the trustee), based on the belief in the capability of this e-provider to act dependably, securely, relevantly and reliably within a fastly moving but specified context. Thus, it is argued that e-trust is both ‘objectively’ and ‘subjectively’ determined. The ‘objective’ basis of trust rests on the online reputation of the trustee–reputation mechanisms being crucial to lower information asymmetry present in digital environments– whereas the ‘subjective’ ground of trust is parametrized by the electronic experience of the trustor. The paper introduces and uses models of reputation that stick to the diverse specificities of an online economy and that feature adverse selection and Bayesian updating processes to identify the different mechanisms in play.

The paper is available here.Keywords: trust, reputation, electronic, determinants, mechanisms, models, economics, theory, adverse, selection, Bayes, belief, Markov, Internet, Web