Repairing trust in an e-commerce and security context: an agent-based modeling approach

Abstract

Purpose – The aim of this paper is to study the critical role of trust in electronic commerce extensively in the context of establishing initial trust between trading partners. Ongoing trust between partners can quickly be eroded through security or other trust violations. This paper examines whether customers are willing to transact with an eCommerce vendor in light of security and trust violations. Design/methodology/approach – The paper draws upon research in professional trust relationships and adapts it to the e-commerce context to create a process view of trust violation and repair. Using a design science framework, this paper employs agent-based modeling as the simulation technique to study the implications of security and trust violations on the willingness of customers to continue transacting with the vendor. The simulations are conducted for a variety of trust violations and reconciliation actions. Findings – While some of the results are predictable, the key finding for managers is that moderate reconciliation tactics are effective for all cases but the most severe trust violations, where trust is irrevocably broken. This has clear financial implications, particularly in cases where vendors may operate with small margins in competitive markets. Originality/value – Given the increasing push toward mobile and Internet-based commerce, and the large range of possible trust violations and security incidents in online purchases, coupled with increasing competition among vendors, it becomes imperative for vendors to provide effective tactics to repair customer trust violations when they arise.