Governance Mechanisms as a Means of Increasing Consumer Trust in Online Exchanges: A Signaling Perspective

Abstract

Many consumers seem to be uncomfortable or unwilling in making online transactions. This lack of trust stems in part from the online exchange process itself where consumers are deprived of many traditional cues that they would use to evaluate this process. This research focuses on consumer perceptions of regulatory governance in online exchanges and how signals of governance might act to increase consumer trust in online transac-tions. An experimental methodology was used to examine the effects of different types of structures on consumer perceptions and to provide direction for public policy makers as well as online businesses and private regulatory entities.