"Face to interface" - The establishment of trust in the internet: The caseof e-auctions

In this article the importance of trust in e-commerce is examined. The inst itutionalization of processes which help to establish trust are outlined us ing the example of an internet auction market. First, trust is defined as a multidimensional concept. Subsequently, internet transactions are describe d as a special case of e-commerce from the perspective of the question of t rust: both partners in the transaction lack information about the competenc e, integrity, and benevolence of the other. The seller and buyer in an inte rnet auction market do not share personal knowledge of each other, as they have not met before. There are many uncertainties about the product exchang ed and the modes of transaction. The internet auction market eBay was analy zed to verify empirically that trust is necessary to overcome the risks and imponderabilities of transactions. II was demonstrated that a loss of trus tworthiness reduces the chances of participating successfully in the online trading community. Additionally, it was discovered that the institutionali zation of a feedback mechanism is the basis of a high-trust context and of mechanisms of fine-tuning and control. Trust is therefore the necessary bas is for internet transaction markets and reduces the casts of transaction.