Abstract
As compared to the economic losses, social and psychological losses are of equal importance in discussing the losses when encountering fraud. Taking advantage of a perspective paper form (i.e., free writing style with a mix of description, analysis, and comments) with in-depth discussions and well-developed propositions, we combine considerations from the knowledge gap, platform quality, and risk management to discuss the comparative seriousness of different fraud-caused losses. The conceptual model mainly articulates on a series of relationships among different degrees of knowledge gap, platform quality, and risk management in predicting the various combinative losses in the economic, social, and psychological aspects. Propositions follow. First, when the knowledge gap is higher, the economic losses of being cheated on the internet will be higher, while lower in social and psychological losses. Second, when perceived platform quality is higher, the economic losses of being cheated on the internet will be lower, while higher in social and psychological losses. Third, when platform risk management is better, all aspects of being cheated on the internet will be lower. Based on the assumption of network externality, we also argue that the multiple dimensions of fraud-caused losses may damage e-auction sustainability. Theoretical and practical implications will be discussed.
Highlights
In this age of the information explosion and revolution, utilizing the internet to make transactions have already become a daily routine
To offer an integrative view, a framework that incorporates website attributes, knowledge gap, and risk management is necessary for a discussion of economic versus non-economic losses
When there is better risk management implemented by the website, both the economic and social-psychological losses caused by fraud would be lower
Summary
In this age of the information explosion and revolution, utilizing the internet to make transactions have already become a daily routine. It has been reported that there is still a high proportion of highly educated people who have a high level of knowledge about the internet but are still being cheated by fraudsters This shows the importance of studying knowledge issues in the context of internet fraud from a relative knowledge gap perspective. Gregg and Scott [7] state that in an auction website such as the popular EBay, the risk to the managers is that the online shoppers may be overcharged by sellers to cause economic losses. The website characteristics, knowledge gap between cheater and cheated, and risk management are vital factors that show how economic losses in the context of e-commerce occur. Our conceptual framework could stimulate empirical studies in related imperatives discussed here
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