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take to reveal their true typesā€¯ (Kirmani & Rao,
2000), in order to minimize the uncertainty as-
sociated with information asymmetry in a market
exchange. Market signaling is one way to pass on
information to others in a marketplace (Spence,
1973), and theory posits that a rational consumer
expects a firm to honor the implicit commitment
suggested by the signal. Signaling is best
suited for situations in which a good or service
must be experienced before the gap between per-
ceptions and expectations is evaluated (Kirmani
& Rao, 2000). In other words, signaling is most
useful when the product or service of a vendor is
unknown, as often occurs between Internet us-
ers and e-retailers. Signaling also lends a certain
amount of credibility and assurance when the ac-
tual qualities of the transaction are unobservable.
Research has studied the effects of market signals
such as advertising (Kihlstrom & Riordan, 1984;
Ippolito, 1990), price (Wolinsky, 1983; Milgrom
& Roberts, 1986), quality (Boulding & Kirmani,
1993), and switching costs (Anderson & Weitz,
1992; Eliashberg & Robertson, 1988). Since a
TPO's Web seal is often the only indication of
an institution-based assurance structure, it is an
important market signal for online consumers.
Prior research shows that these signals (i.e., Web
site seals) are important mechanisms to promote
trust in electronic exchanges.
to hold credible information and to be unbiased
communicators of information (Dean & Biswas,
2001). A message delivered by a highly credible
source is accepted more readily by the receiver
and is more likely to lead to a change in attitude
(Miller & Baseheart, 1969; Schulman & Wor-
rall, 1970).
TPOs offering e-commerce assurance services
may be perceived in the electronic marketplace
as third-party endorsers. The signals generated
by a Web seal may enhance perceptions of trust
for the e-retailer, based on the trustworthiness
or expertise of the third party, regardless of the
actual assurance services provided. For example,
online consumers may believe that the TPO's Web
seal signals greater product quality or service
quality rather than serving as an indicator of the
assurance services that are rendered. We contend
that online consumers assign value to assurance
symbols in direct relation to their TPO credibility
beliefs rather than to their beliefs about the assur-
ances. This possible misconception of the market
signal has important implications for e-retailers,
assurance providers, and online consumers.
ConCeptual Framework and
hypotheses
Shankar et al. (2002) outline a broad framework
to motivate and to elicit research in online trust.
From relevant literature, they identify three groups
of antecedent factors to online trust. These groups
include Web site characteristics, user character-
istics, and other characteristics. Web site charac-
teristics include factors such as user friendliness,
error-freeness, privacy, brand, presentation, and
Web assurance seals. User characteristics encom-
pass variables such as past shopping experience,
Internet savvy, predisposition to technology,
and feelings of control. The third group includes
a broad range of other characteristics such as
perceived size of the firm, perceived reputation
of the firm, communication, and personalization.
tpo Credibility
In consumer behavior literature, endorser cred-
ibility influences both consumer attitudes and
behavioral intentions (Harmon & Coney, 1982;
Moore et al., 1988; Sternthal et al., 1978), since
endorser credibility is related to trustworthiness
and expertise. Consumers often transfer the
perceptions of trust and expertness generated
in response to the endorser onto the product,
service, or organization that is being recom-
mended (Hawkins, Best, & Coney, 1998). Thus,
the importance of endorser credibility should
not be underestimated. Endorsers are perceived
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