A Trust Model for Consumer Internet Shopping

Matthew K. O. Lee and Efraim Turban

ABSTRACT: E-commerce success, especially in the business-to-consumer area, is determined in part by whether consumers trust sellers and products they cannot see or touch, and electronic systems with which they have no previous experience. This paper describes a theoretical model for investigating the four main antecedent influences on consumer trust in Internet shopping, a major form of business-to-consumer e-commerce: trustworthiness of the Internet merchant, trustworthiness of the Internet as a shopping medium, infrastructural (contextual) factors (e.g., security, third-party certification), and other factors (e.g., company size, demographic variables). The antecedent variables are moderated by the individual consumers degree of trust propensity, which reflects personality traits, culture, and experience. Based on the research model, a comprehensive set of hypotheses is formulated and a methodology for testing them is outlined. Some of the hypotheses are tested empirically to demonstrate the applicability of the theoretical model. The findings indicate that merchant integrity is a major positive determinant of consumer trust in Internet shopping, and that its effect is moderated by the individual consumers trust propensity. KEY WORDS AND PHRASES: E-commerce trust, Internet shopping, trust model, trust propensity, trust theory, trustworthy attributes. The growth of the Internet and its user base in recent years has been truly phenomenal. In most developed countries, the number of Internet users is 20 50 percent of the total population. In the United States alone, the number of people with Internet access via home PCs reached 136 million in September 1 2000, and the annual growth rate remains high. In Hong Kong, the number of people with Internet access accounts increased from less than 1 million in March 1999 to more than 2.3 million (about one-third of the total population) 2 in November 2000, indicating very robust growth. Enormous potential exists for the use of the Internet for the purchase of goods and services. The potential for Internet shopping is underexploited, however, because as recent market surveys have confirmed, many users are reluctant to make purchases on the Internet. In Hong Kong, for instance, only 5 percent of active Internet us3 ers made purchases through the Internet in 2000. Lack of trust is one of the most frequently cited reasons for consumers not purchasing from Internet shops. Despite the importance of trust in consumer-based e-commerce, there has been very little theory-guided empirical research on the nature of trust and its antecedents in the specific context of Internet shopping. This paper attempts to fill the gap. Drawing from the findings of e-commerce research
The work described in this paper was partially supported by grants from the Research Grants Council of the Hong Kong Special Administrative Region, China (Project Nos. CityU 1191/98H and CityU 1204/97H). A preliminary version of this paper was presented at the International Conference on Electronic Commerce 2000 (ICEC2000), held in Seoul, Korea, on August 21 24, 2000. Jae Kyu Lee served as the guest editor for the paper.
International Journal of Electronic Commerce /Fall 2001, Vol. 6, No. 1, pp. 7591. Copyright 2001 M.E. Sharpe, Inc. All rights reserved. 1086-4415/2001 $9.50 + 0.00.

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and integrating trust theories from the fields of marketing, psychology, and sociology, it describes the development of a theoretical model for the investigation of trust and its antecedents in the context of Internet shopping. In addition, it presents details of a potential empirical investigation of some major hypotheses arising from the model. Findings from such research could extend trust and e-commerce theories, and be used to guide efforts by the e-commerce community to increase consumer trust in Internet shopping.

Background and Literature Review

This paper describes the development of a research model that can be used to examine consumer trust and its determinants in the context of Internet shopping. Although the importance of trust is widely recognized, there is widespread disagreement about its definition, characteristics, antecedents, and outcomes. Mayer, Davis, and Schoorman have identified five issues that summarize the root of this disagreement [36]: the difficulty of defining trust confusing trust with its antecedents and outcomes failing to clearly understand the relationship between trust and risk confusing the levels of analysis due to lack of specificity of trust referents failing to consider both the trusting party and the party to be trusted.

In addition, the trust literature concentrates on person-to-person trust (e.g., in psychological studies) or organization-to-organization trust (e.g., in the study of strategic alliances) or people-to-computing systems trust (e.g., in the study of user interfaces of mission-critical computing systems). Researchers have given little attention to trust between people and organizations, and there are almost no empirical studies on consumer trust in Internet shopping. The few available ones (e.g., Jarvenpaa et al. [25]) rely on limited models (focused solely on the Internet merchant) and use ad hoc samples, ignoring some important antecedents (e.g., those related to the Internet marketing channel). To further complicate things, Internet shopping involves trust not simply between the Internet merchant and the consumer, but also between the consumer and the computer system through which transactions are executed. Since Internet shopping is a relatively new phenomenon with enormous potential, there is a strong need to reexamine the notion of trust and identify its determinants in this context in different markets and cultures. In particular, it is necessary to: 1. develop a notion of consumer trust specific to the Internet shopping context

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2. discover the existing level of consumer trust toward Internet shopping in different markets or cultures (countries) 3. develop and empirically test a model of consumer trust and its antecedents in the context of Internet shopping. Trust is an especially important factor under conditions of uncertainty and risk. As a new form of commercial activity, Internet shopping involves more uncertainty and risk than traditional shopping. Internet shops are less well known to consumers. Moreover, a consumer cannot physically check the quality of a product before making a purchase, or monitor the safety and security of sending sensitive personal and financial information (e.g., credit card numbers) through the Internet to a party whose behaviors and motives may be hard to predict. The importance of trust in e-commerce cannot be overestimated. Many studies have identified the building of trust as a fundamental and yet unresolved issue in the development of Internet shopping (e.g., [20, 41]). The notion of trust has been examined in various contexts over the years for example, as related to bargaining [43], industrial buyer-seller relationships [14], distribution channels [15], partner cooperation in strategic alliances [12], and the use of market research [38]. The theoretical perspectives used in these studies may be aggregated into three categories [36]: personality theory, conceptualizing trust as a belief, expectancy, or feeling deeply rooted in the personality and originating in the individuals early psychological development sociology and economics, conceptualizing trust mainly as a phenomenon within and between institutions, and as the trust individuals put in those institutions social psychology, characterizing trust in terms of the expectations and willingness of the trusting party in a transaction, the risks associated with acting on such expectations, and the contextual factors that either enhance or inhibit the development and maintenance of that trust.

Although the social-psychological perspective appears to be most relevant for understanding consumer trust in Internet shopping because it focuses on transactions, the other perspectives are also important. For example, a consideration of consumer trust in Internet shopping that did not examine trust propensity, a personality trait of the concerned consumers, would be quite inadequate. The perceived trustworthiness of a participating party is often thought to be an important antecedent of trust. Trustworthiness encompasses certain personal attributes conducive to the building of trust. Table 1 summarizes some of the main attributes that have been found to lead to trust in general. Three attributes arguably constitute the main elements of trustworthiness: ability, benevolence, and integrity [36]. Ability comprises the skills and competencies enabling a party to have influence within some specific domain. As

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Authors
Butler [5]

Trustworthiness attributes
Availability, competence, consistency, discreetness, fairness, integrity, loyalty, openness, promise fulfillment, receptivity Ability, trustworthy intentions Ability, intention to deliver Reputation, size, willingness to customize Ability, intention, trustees promises Competence, motives Competence, integrity Moral integrity, goodwill

Cook and Wall [1 1] Deutsch [13] Doney and Cannon [14] Good [19] Kee and Knox [27] Lieberman [35] Ring and Van de Ven [42]

Table 1. Trustworthiness Attributes. such, ability is domain-specific. In the present context it relates to the competence of a company in the Internet shopping business. Benevolence is the extent to which the trusting party believes that the trusted party wants to do good things rather than just maximize profit. Integrity is the trusting partys perception that the trusted party will be honest and adhere to an acceptable set of principles. In the literature, the term reputation sometimes encompasses competence and integrity. Doney and Cannon, for example, define a firms reputation as the extent to which customers in the industry believe that the firm is honest and concerned about them [14]. Thus, the three trustworthiness attributes include the concept of reputation. As noted by Lewicki and Bunker, trust is situational and context-specific, and should be investigated under specific contextual and situational parameters [33]. In the context of Internet shopping, risk is a relevant situational parameter in that (1) there is uncertainty about the outcome of an Internet shopping transaction, (2) the outcome depends on the behavior of the Internet merchant, which is not within the consumers purview and control, and (3) the harm of an undesirable outcome may be greater than the benefits of a successful outcome. A number of context-specific parameters are worth considering in the context of Internet shopping. Hoffman, Novak, and Peralta argue that the effectiveness of third-party trust-certification bodies (e.g., TRUSTe or Verisign)4 and the public key encryption infrastructure for ensuring transactional security (including privacy protection) are central success factors for building consumer trust in Internet shopping [20, 46]. Kini and Choobineh suggest that trust in the Internet merchant is necessary but not sufficient for an Internet shopping transaction to take place. The consumer must also trust the transaction medium for Web shopping (i.e., a computer connected to servers and to the Internet) [28]. Lee and Moray found that whether an operator trusts an automated system influences whether the operator will use that system [32]. Trust in an automatic system is mainly dependent on the systems perceived technical competence and performance, and the operators understanding of the underlying characteristics and processes that govern the systems behavior. The literature on trust crosses a wide variety of disciplines. It provides a useful basis for investigating consumer trust and its antecedents in the context of Internet shopping, but as pointed out by Mayer, Davis, and Schoorman,

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many researchers confuse trust with its antecedents [36]. For example, Kini and Choobinehs definition of trust includes the sources of trust [28]. In addition, most of the literature offers no supporting evidence. Theory-guided empirical studies of consumer trust in Internet shopping are relatively rare, a severe lack that critically impedes an understanding of consumer trust in Internet shopping. The authors hope that this paper will improve the situation.

The Proposed Model

Based on a review of the literature, the authors have developed a theoretical model for the antecedents of trust in consumer Internet shopping (businessto-consumer [B2C]). The model is shown in Figure 1. The independent variables (on the left) fall into four broad categories: (1) trustworthiness of the Internet merchant, (2) trustworthiness of the Internet shopping medium, (3) Internet shopping contextual factors, and (4) other factors (e.g., control factors, such as size of Internet merchant, demographic variables, prior related experience). The effect of these variables on the dependent variable of consumer trust in Internet shopping (CTIS) is moderated by the trust propensity of the consumer concerned. The level of trust propensity is expected to be fairly stable over time and can be measured. The model suggests that the level of trust, which is a personality trait, moderates the relationships between the independent and dependent variables, as will be shown below. The definition of trust from Mayer, Davis, and Schoorman is adopted, with modifications for use in the Internet shopping context [36]. CTIS is defined as the willingness of a consumer to be vulnerable to the actions of an Internet merchant in an Internet shopping transaction, based on the expectation that the Internet merchant will behave in certain agreeable ways, irrespective of the ability of the consumer to monitor or control the Internet merchant. The model is not all-embracing in that it does not attempt to capture every possible antecedent of trust. It is focused on capturing the most significant set of trust antecedents, derived from different lines of previous research, and presenting them as an integrated entity that can provide direction for empirical testing. Other variables that might affect the model (e.g., experience with the Internet, age, gender) can be controlled in empirical tests.

The Models Components and Possible Research Hypotheses

The discussion in this section postulates some hypotheses, derived from previous research and from discussions with e-commerce merchants, that indicate directions for future research.

Trustworthiness of Internet Merchant

Many researchers have studied the influence of perceived trustworthiness on building trust. As indicated earlier, ability, integrity, and benevolence are con-

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Trustworthiness of Internet Merchant - ability - integrity - benevolence

Other Factors

Trustworthiness of Internet Shopping Medium - technical competence - reliability - medium understanding

Consumer Trust in Internet Shopping (CTIS)

Contextual Factors - effectiveness of third party certification - effectiveness of security infrastructure

Individual Trust Propensity

Figure 1. A Proposed Model for Consumers Trust in Internet Shopping sistently related to trust in most studies and thus are included in the present research framework. These three factors encompass, and represent different dimensions of, the concept of reputation. Some possible hypotheses for this group of factors are: H1: The perceived ability of an Internet merchant is positively associated with CTIS. H2: The perceived integrity of an Internet merchant is positively associated with CTIS. H3: The perceived benevolence of an Internet merchant is positively associated with CTIS. Since these antecedents are all fairly broad, one can create several subhypotheses and measures for each of the hypotheses when undertaking a research design. Additional variables may be identified and will be employed to create new hypotheses.

Trustworthiness of the Internet Shopping Medium

In the literature on human-computer interface and ergonomics, trust is identified as a factor affecting human choice of the use of computerized systems [39]. Internet shopping is an activity that necessarily entails primary interactions with computer systems. In some senses, the Internet device (e.g., personal computer, WebTV) that the consumer interacts with is analogous to the salesperson in a traditional shop. The extent to which consumers trust this computerized medium is likely to affect their overall trust in Internet shopping. According to Lee and Moray, human trust in an automated or comput-

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erized system depends on three factors: (1) the perceived technical competence of the system, (2) the perceived performance level of the system, and (3) the human operators understanding of the underlying characteristics and processes governing the systems behavior [32]. The technical competence of a system is its ability to perform the tasks it is supposed to perform. Performance level includes such parameters as speed, reliability, and availability. These three variables together may influence consumer trust in the Internet shopping medium (ISM). Some possible hypotheses for this group of factors are: H4: The perceived technical competence of the ISM is positively associated with CTIS. H5: The perceived performance level of the ISM is positively associated with CTIS. H6: The degree to which a consumer understands the workings of the ISM (referred to as medium understanding) is positively associated with CTIS. Again, subhypotheses and a variety of measures are possible, as well as additional hypotheses related to this topic.

Contextual Factors
As noted earlier, several contextual factors are important in trust building. Most noteworthy are the issues of security and privacy, which can be protected by public key encryption (PKI) systems and the related SSL and SET protocols. Also important are third-party certification, escrow, and insurance services. Some possible hypotheses for this group of factors are: H7: The perceived effectiveness of third-party certification bodies (certification effectiveness) is positively associated with CTIS. H8: The perceived effectiveness of public key security infrastructure (security effectiveness) is positively associated with CTIS. Again, subhypotheses and a variety of measures are possible, as well as additional hypotheses related to this topic.

Other Factors
This group includes factors that do not fit the preceding categories but may have a bearing on CTIS. Examples include the size of an Internet shop [25] and various demographic variables of the buyers, such as sex, age, and Internet usage experience. Since the variables in this group are less coherent from a theoretical perspective, they tend to be treated as control variables rather than tested as independent variables in similar studies. However, this does not rule out the value and possibility that variables in this group may be tested individually in a research redesign.

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Trust Propensity
The impact of the trust antecedents just presented can be influenced by the propensity of the individual to trust. Hofstede found that this trait is dependent on cultural background, personality type, and developmental experience [21]. The propensity to trust is a personality trait that moderates the effect of trustworthiness attributes on the formation of trust. This position is supported by Mayer, Davis, and Schoorman [36]. When deciding whether and how much to trust, consumers look for cues (e.g., trustworthiness attributes). Trust propensity magnifies or reduces the signals the cues provide. This moderation effect acts positively in the sense that the higher the level of trust propensity, the greater the impact of trust attributes on the formation of trust. Some possible hypotheses for this group of factors are: H9: Trust propensity positively moderates the relationship between the perceived abilities of Internet merchants and CTIS. H10: Trust propensity positively moderates the relationship between the perceived integrity of Internet merchants and CTIS. H11: Trust propensity positively moderates the relationship between the perceived benevolence of Internet merchants and CTIS. H12: Trust propensity positively moderates the relationship between the perceived technical competence of the ISM and CTIS. H13: Trust propensity positively moderates the relationship between the perceived performance level of the ISM and CTIS. H14: Trust propensity positively moderates the relationship between medium understanding and CTIS. H15: Trust propensity positively moderates the relationship between certification effectiveness and CTIS. H16: Trust propensity positively moderates the relationship between security effectiveness and CTIS. Again, subhypotheses and a variety of measures are possible, as well as additional hypotheses related to this topic. Such hypotheses can be tested empirically, using a sample survey or experiments. Guidelines for hypothesis testing using a survey research methodology are provided in the appendix.

Applicability of the Model

To illustrate the applicability of the model, Cheung and Lee selected six hypotheses for initial testing [6]. They also investigated some of the key trust constructs in a related trust model, and developed and validated the corresponding measurement instrument [7]. The six hypotheses they selected were: H1 (ability of the merchant), H2 (integrity of the merchant), H7 (third-party

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certification), H9 (ability moderated by trust propensity), H10 (integrity moderated by trust propensity), and H15 (third-party certification moderated by trust propensity).

Methodology: Instrument Development and Testing

Cheung and Lee used a survey research approach to measure the following five of the constructs in the proposed model: (1) perceived integrity of Internet merchants (related to H2 and H10), (2) perceived ability of Internet merchants (related to H1 and H9), (3) individual trust propensity (the moderating effect), (4) perceived effectiveness of third-party certification (related to H7 and H15), and (5) consumer trust in Internet shopping (the dependent variable) [6]. They employed a three-phase instrument-development process, following the guidelines of Moore and Benbasat [37]. In phase I, 19 measures were identified, mainly by in-depth interviews with subject experts and potential Internet shoppers. These measures are shown in Table 2. In phase II, the initial construct validity of the measures was put to the test using a four-judge panel. Each of the judges was asked to sort the measures into conceptual constructs based on similarity of meaning. Almost all the measures were sorted correctly, with a very high degree of agreement among the judges. This was suggestive of a high degree of initial convergent and discriminant validity. In phase III, the instrument was pilot-tested using a sample of 40 students from a local university. Using Cronbachs alpha test with an acceptance level of 0.7 (see [40]), one of the measures was removed. The remaining 18 measures were then field-tested using a convenient sample of 405 business school undergraduates majoring in management information systems (MIS) at the City University of Hong Kong. This test resulted in the removal of three additional measures. The relationship between the five constructs and the 15 remaining statements of the measures is shown in Table 2. The 15 statements were then subjected to an exploratory factor analysis to assess the construct validity of the instrument. EQUAMAX rotation was used in the exploratory factor analysis. The measures loaded correctly on the constructs, with a total of 68.8 percent of the variance being explained by the data. The EQUAMAX approach was used as a compromise between two frequently used methods, QUARTIMAX and VARIMAX, to arrive at the best interpretation. In practice, the objective of all methods of rotation is to simplify the rows and columns of the factor matrix to facilitate interpretation. Rather than concentrating either on simplification of the rows or simplification of the columns, the EQUAMAX approach tries to accomplish some of each. The factor loadings (shown in Table 2) were good, with most of them exceeding 0.7. Even the lowest factor loading of 0.523, could be regarded as acceptable [10]. The details of the factor matrix and other statistics can be found in Cheung and Lee [6, 8].

Testing the Hypotheses

A survey questionnaire containing the 15 statements was administered to a convenient sample of undergraduate business students at a university in Hong

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Construct
Perceived integrity

Measure
Internet merchants will not charge Internet shoppers more for Internet shopping.1 Internet merchants are honest with their consumers. Internet merchants act sincerely in dealing with customers. I will not be overcharged by Internet merchants during sales transactions.2

Source
New measure Moorman et. al. [38] Moorman et. al. [38] New measure New measure New measure New measure Doney & Cannon [14] New measure New measure New measure New measure New measure

Factor loading
0.555 0.796 0.523 0.760 0.916 0.794 0.784 0.756 0.717 0.588

Perceived ability

Internet merchants have the ability to handle sales transactions on the Internet. Internet merchants have sufficient expertise and resources to do business on the Internet. Internet merchants have adequate knowledge to manage their business on the Internet. Most Internet merchants have a good reputation.1

Trust propensity

It is easy for me to trust a person/thing. My tendency to trust a person/thing is high. I tend to trust a person/thing, even though I have little knowledge of it. Trusting someone or something is not difficult.

Third-party recognition

There are many reputable third-party certification bodies for assuring the trustworthiness of Internet merchants. I think third-party recognition bodies are doing a good job. Existing third-party recognition bodies are adequate for the protection of Internet shoppers interest.

New measure New measure

0.755 0.669

Trust in Internet shopping

Internet shopping is unreliable. Internet shopping cannot be trusted, there are just too many uncertainties. In general, I cannot rely on Internet vendors to keep the promises that they make. Anyone trusting Internet shopping is asking for trouble.1

New measure New measure Chow & Holden [9] Chow & Holden [9]

0.715 0.776 0.604

Seven-point Likert scale used in the instrument: 1 Strongly disagree 2 Disagree 3 Mildly disagree 4 Neither agree nor disagree 5 Mildly agree 6 Agree 7 Strongly agree

Table 2. Key Measures in the Instrument.

1. Measures removed after full-scale field test. 2. Measures removed after pilot test.

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Construct
Perceived integrity Perceived ability Individual trust propensity Third party recognition Trust in Internet shopping

Mean
3.63 4.15 4.4 3.76 3.51

Std. deviation
0.91 0.94 0.77 0.79 1.09

Table 3. Summary Statistics. Kong during the winter of 1999. Completed responses were received from 405 students, 95 percent of whom were Internet users with no Internet shopping experience. This group of respondents was used to test the hypotheses so that the variable of Internet shopping experience could be controlled. Cheung and Lee used the questionnaire to test the effect of two Internet merchant trustworthiness attributes (perceived integrity and perceived ability) and one environmental attribute (perceived effectiveness of third-party certification) on the level of consumer trust in Internet shopping, using a sevenpoint Likert scale [7]. Specifically, the moderating effect of individual trust propensity on these trust antecedents was examined empirically.

Results
The results for each of the five constructs are summarized in Table 3. Since a seven-point Likert scale was used to measure the intensity of each construct, a mean score of 3.5 indicates a neutral response, while a mean score of 1 represents an extremely negative response, and a mean score of 7, an extremely positive response. Respondents exhibited a fairly high level of individual trust propensity (mean score = 4.4) and perceived Internet merchants as quite able (mean score = 4.15). On the other hand, their perceptions of the integrity of Internet merchants, the effectiveness of third-party certification, and their overall trust level toward Internet shopping were significantly lower (mean scores well below 3.8). The six hypotheses were tested using multiple linear regression in accordance with the guidelines in the appendix. The results, shown in Table 4, indicate (apparently for the first time in e-commerce research) the value of the moderating effect of individual trust propensity. The results also indicate the strong effect of perceived integrity on consumer trust toward Internet shopping. In other words, hypotheses H2 and H10 were supported, but not hypotheses H1, H7, H9, and H15. The implication is that Internet merchants who want to increase consumer trust in shopping with them should focus on increasing their integrity in the minds of consumers. Integrity is demonstrated through honesty and strict adherence to a set of principles accepted by consumers. Marketing campaigns by Internet merchants would be advisable to convey a clear message of honesty. In addition, company policies, especially when it comes to the handling of customer relationships, should be guided by a consistent set of principles (e.g., privacy protection principles and consumer

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Hypothesis tested

Standardized coefficient
0.02 0.35 0.09

tvalue
0.17 2.34 0.68

pvalue
0.87 0.02* 0.49

HI: Effect of perceived ability on trust in Internet shopping H2: Effect of perceived Integrity on trust in Internet shopping H7: Effect of perceived effectiveness of third-party recognition on trust in Internet shopping H9: Interaction effect of perceived competency and individual trust propensity on trust in Internet shopping (i.e., testing the moderating effect of individual trust propensity) H10: Interaction effect of perceived integrity and individual trust propensity on trust in Internet shopping (i.e., testing the moderating effect of individual trust propensity) H15: Interaction effect of third-party recognition and individual trust propensity on trust in Internet shopping (i.e., testing the moderating effect of individual trust propensity)

0.07

0.29

0.77

0.48

2.00

0.04*

0.33

1.38

0.17

Table 4. Hypotheses Testing Result.

*Test significant at the <0.05 level.

protection principles) that are visible to consumers. One way to do this to have these principles displayed up front in an eye-catching place on the companys Internet storefront.

Limitations
The first limitation of the empirical study is the use of a convenient sample rather than a random one, since this may have introduced a sampling bias. In Hong Kong all students surf the Internet, but they may not represent the entire Hong Kong population. Another limitation is the use of potential rather than actual Internet shoppers in the study, because these two groups may exhibit different trust behaviors and perceptions. In addition, contrary to theory and conventional wisdom in the e-commerce world, no empirical support was found for the effect of perceived ability and third-party certification on consumer trust on Internet shopping. This requires further qualitative investigation in order to discover the underlying reasons. A limitation of the proposed model is that it does not deal with the consequences of trust. Along with attitude, risk perception, and subjective norms, trust is one of the factors affecting on-line consumer behavior [25, 31]. Since the concept of trust is intimately related to (and often confused with) the concept of risk, an understanding of trust that does not examine its relationship with risk is incomplete. Whether and how trust affects perceived risk (or vice versa) in the Internet shopping context is still very much an open issue. In addition, the building and maintenance of trust is an ongoing process with its own set of dynamics, and thus the antecedents and consequences of trust may not be the same in the different stages of trust development and maintenance [16]. These and other related issues are discussed by Lee and Fung and by Cheung and Lee [6, 31].

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Conclusion
This paper has reviewed the nature of consumer trust in Internet shopping and developed a research model for studying it. The model presents the major relationships between consumer trust in e-commerce and four groups of major potential antecedents: trustworthiness of the Internet merchant, trustworthiness of the Internet shopping medium, infrastructural (contextual) factors, and other factors. The construct of individual trust propensity is believed to positively moderate the effect of these antecedents on consumer trust. The hypotheses that can be generated from the model provide directions for further empirical testing. Many of the hypotheses are so interesting and controversial as to warrant investigation on their own. For example, the moderating effect of trust propensity on trust antecedents is a phenomenon that has never been tested in the context of e-commerce. Jarvenpaa et al. argue that national culture has an impact on trust [25], but this is not supported by the empirical data in their study [35]. Perhaps national culture does not have a direct impact on trust but instead affects the individual trust propensity moderating the trust antecedents, as hypothesized in the model presented in this paper. The present study supports to some extent the view that national culture may be just one of several antecedents of individual trust propensity. The trust model presented in the preceding pages provides a coherent framework for empirical research on the phenomenon of Internet consumer trust. With proper operationalization, the hypotheses can be readily tested using the methodology suggested in the paper. As summarized above, Cheung and Lee have demonstrated the models practical applicability [7]. Further study of this model and empirical testing will lead to a better understanding of the role of trust in e-commerce. The results will clarify and enrich the relevant theories and extend their boundaries. They will, in addition, tell Internet merchants which trust antecedents to focus on in order to increase consumer trust and thus improve the chances of consumers purchasing from them. Once the relative importance of the various trust antecedents is known, management can concentrate on influencing those that are most important. Bearing in mind that most of the trust antecedents are perceptual in nature, they may be influenced by advertising and marketing campaigns, visible company policies, and the design of Internet storefronts. How storefront design parameters may affect the success of an Internet storefront is discussed by Gehrke, Turban, and Lee [17]. Examples of customer relationship management policies and Internet storefront parameters that may affect consumer trust in Internet shopping through their effects on trust antecedents in the model presented here will be found in Turban et al. [45]. They include: credit card loss-assurance policies product warranty policies policy on returned merchandise availability of escrow service

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ability to schedule human customer service sessions (e.g., by telephone or on the Internet) availability of user-friendly, reliable, efficient storefront interfaces with animated characters.

Finally, research into the trust model developed in this paper will help accelerate the growth of consumer e-commerce by removing one of the major remaining obstacles to its development, namely, lack of trust.

Appendix: Guidelines for Testing the Theoretical Model

The hypotheses related to the model can be tested by a sample survey. Using an appropriate questionnaire for data collection, one can obtain results with good external validity and generalizability. Multiple items can be used to operationalize each construct in the model, following standard procedures for developing a psychometric scale [1, 2, 37]. The items on each scale can be generated on the basis of similar measures in the literature, and by interviews with Internet users. The items can be measured on a five- or seven-point Likert scale, which is suitable for the measurement of perceptions. The resulting questionnaire needs to be pilot-tested (through interviews) with at least 50 Internet users to assess consistency, ease of understanding, question sequencing, and clarity. The resulting refined instrument should then be administered (using a postal survey) to a large enough random sample of the target population. Internet users form a good population from which to draw samples as they tend to be closest to becoming Internet shoppers if they are not already shopping on the Internet. If structural equation modeling techniques are to be used for model testing, one has to be particularly careful about sample size to avoid problems of model underidentification [4]. Follow-up telephone calls and e-mail messages can be made to improve the response rate if necessary. The measurement instrument can be tested for reliability (e.g., by calculating Cronbachs alpha) and validity (e.g., by principal component factor analysis). The psychometric properties of each measure can also be tested using confirmatory factor analysis, such as LISREL VIII [26], to gain further confidence in the reliability and validity of the measurement scales. Since the use of structural equation modeling techniques for analyzing theoretical models containing moderators is still very much in its infancy [23, p. 68], standard multiple regression techniques can be used to test the theoretical model instead. The moderation effects of the research model can be tested using the analytical framework described by Baron and Kenny [3] and techniques described in detail by Jaccard, Turrisi, and Wan [24], all within a multiple regression framework. NOTES
1. According to Nielsen, NetRatings, September 7, 2000 (www.eratings.com/ news/20000907.htm).

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2. OFTA statistics of Customers of Licensed Internet Service Providers in Hong Kong (www.ofta.gov.hk/index_facts_eng.html). 3. ACNielsen Project Online 2000, ACNielsen.online (jtsin@acnielsen.com.hk). 4. For examples, see www.truste.com or www.verisign.com.

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MATTHEW K.O. LEE (ismatlee@cityu.edu.hk) is professor of information systems and head of the IS department at the City University of Hong Kong. He previously taught at the University of London and worked as a research scientist at British Petroleum Research International in the UK. He holds a Ph.D. from the University of Manchester, and is professionally qualified as a barrister-at-law and a chartered information systems engineer in the UK. Dr. Lee has a research and professional interest in information technology adoption and diffusion (focusing on systems implementation management issues), electronic commerce, and the legal, ethical, and policy aspects of information technology. He has published more than 60 articles in international conferences and journals, including Communications of the ACM, Journal of Information Science, Information Systems Frontiers, and the International Journal of Technology Management, is on the editorial board of Information Systems Journal, and is a co-editor of a book on software engineering. He is a member of the IT Projects Vetting Committee of the Innovation and Technology Commission in Hong Kong, advising the government commission on the funding of key R&D projects in the area of IT. EFRAIM TURBAN (isturban@cityu.edu.hk) is a visiting professor of information systems at the City University of Hong Kong, and previously was on the faculties of the University of Southern California and Florida International University. He is the author of several textbooks on decision-support systems, information technology for management, and electronic commerce, and has published close to 100 papers in Management Science, Journal of Management Information Systems, MIS Quarterly, and other leading journals. His current research interests focus on the development and use of e-commerce applications.

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