Seller Reviews and Consumers' Perceptions of Trust, Risks, and Uncertainty

Abstract

Based on the principal-agent theory, the authors posit that seller-related uncertainty is derived from buyer (the principal) fears of hidden information (information asymmetry) and hidden action (seller opportunism) on the part of sellers (the agents). The study evaluates the effects of the three antecedents of trust in the seller reviews context with a quasi-experiment. The authors enhance the validity of the research manipulation through a unique approach of creating reviews through a text mining process of actual seller reviews. This allows control over the content of reviews while retaining their realism. The findings validate that the principal-agent theory provides a good fit for understanding seller-related uncertainty in e-commerce transactions. Second, buyers appear to be more concerned about seller opportunism than with information asymmetry. Third, while assessments of integrity and competence of the vendor, assessed through reviews, play a role, benevolence does not.