Abstract
Assessing the trustworthiness of others is an essential part of the daily interactions that take place between individuals in various social settings. The level of uncertainty and the nature of what is at stake affect the risks involved in a given interaction situation. Furthermore, the mechanisms that are put in place to help individuals assess the trustworthiness of others typically vary according to the levels of uncertainty and risk in the setting. As it becomes progressively more common to interact and engage in exchanges using computer-mediated communication systems such as the Internet, the anonymity of individuals and the reduction in available social cues increase the risks as well as the possibilities for misjudging trustworthiness and thus increase the possibilities for significant loss or even harm. In this chapter we examine the factors that individuals use when determining the trustworthiness of exchange partners who provide either goods or services in online environments. Following current theory and research, we argue that the competence and motivations of the exchange partner are two key bases of individuals’ inferences about trustworthiness, particularly when there are no third-party or credible institutional devices in place to reduce uncertainty and manage risk. However, we demonstrate that the effects of competence and motivation have different relative degrees of importance in online goods markets compared to online service markets. We present the results of an exploratory study designed to examine how individuals assess the trustworthiness of others in online markets for goods and services.