Roles of the buyer’s trust in seller in posted-price model of consumer to consumer e-commerce

Abstract

The buyer’s trust in seller in consumer to consumer e-commerce plays a critical role in consumer purchase decisions. Thus, this paper aims at analyzing the relationships between buyer’s trust in seller, price discount, and price premium by using product price as a moderator variable. A trust function for sellers was calculated through a questionnaire, by using the feedback mechanism and by applying Analytical Hierarchy Process. Our empirical study, using historical transaction data, indicates that buyer’s trust in seller in the case of an expensive product is more important than that in an inexpensive product. Buyers’behavior when purchasing a higher-priced product was more sensitive to the buyer’s trust in seller than to product price. Product price played the role of a moderator variable in the relationship between buyer’s trust in seller and price discount. However, there was no evidence that product price performs the function of a moderator variable in the relationship between buyer’s trust in seller and price premium.