Information Technology Reference
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research is necessary in order to evaluate the
extent to which users may depend on the reputa-
tion of the TPO to influence purchase decisions.
For example, the credibility of the TPO may be
more influential in high-risk purchases vs. low-
risk purchases or in relation to familiarity with
the e-retailer. Additionally, credibility may be a
useful strategy in order to differentiate TPOs in
the assurance market.
In applying signaling theory and the economics
of information to this study, the findings suggest
that credibility factors influence the value of the
assurance signal. In high-risk purchase situations
with an unknown e-retailer, consumers are likely
to look for assurances of a positive outcome. Thus,
the assurance symbol becomes important for the
completion of the transaction, and users are likely
to value the symbols of highly credible TPOs to
a greater extent. Consequently, if value signals
are appropriate mechanisms to convey trust, it
is essential that e-retailers employ the symbols
of highly credible organizations.
In traditional buyer-seller relationships, TPO
endorsement is distinguished by the characteris-
tics of trustworthiness and expertise attributed to
the endorsing organization. This study indicates
that online consumers may be making a similar
application of endorsement mechanisms in the
electronic marketplace. Also, TPO endorsements
in the traditional marketplace often are perceived
as product quality signals (Dean & Biswas, 2001).
Assurance service organizations typically make
no claim as to product quality, yet consumers
often perceive that they do (Houston & Taylor,
1999). E-commerce would benefit from additional
research, identifying the aspects of the e-retailer
that users believe the TPO is sanctioning (e.g.,
the Web site, the transaction, the e-retailer, or
product/service quality).
Endorsement perceptions have a variety of
implications for e-retailers and assurance provid-
ers. Reputations may be affected by numerous
variables such as consumer satisfaction with
products or services, quality, business operations,
Web assurance services were created to address
online consumers' security concerns in order to
generate the trust necessary to complete electronic
transactions. This study confirms prior research,
showing that institution-based assurances enhance
trust perceptions. This research also extends the
concept by identifying an additional mechanism
through which assurances influence user trust.
We show that trust may originate in a credibility
dimension related to the reputation of the assur-
ance organization. Thus, for some consumers,
trust may have less to do with their online privacy
and security needs and more to do with what they
believe about the TPO identified on a Web site.
This has important implications for the design of
Web assurance services, the selection of assurance
providers and services, and the reputation of both
e-retailers and providers.
For example, assurance service firms often
attempt to differentiate in the market by enlarging
their scope of services. What began as a service to
users to establish the legitimacy of e-businesses
(e.g., BBB OnLine Reliability) has grown in scope
to examining e-retailers' business practices, elec-
tronic control mechanisms, and systems integrity
(e.g., WebTrust). If institutional assurances are
viewed as recommendations not associated with
these specific assurance services, then expand-
ing the range of services may have little value in
attracting consumers. This is an important topic
for future investigation.
Furthermore, the selection of the TPO becomes
an important consideration, if perceived cred-
ibility is an important factor for consumers. Most
assurance providers are selected by e-retailers
based on cost (Craig, 2000), not reputation. This
study indicates that the value of individual Web
seals is related to what users believe about the
trustworthiness, reliability, integrity, and expert
knowledge of the TPO. TPO credibility may have
more impact on perceptions of purchase risk
and trusting attitudes than anticipated. Further
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