Facilitating conditions and institutional trust in electronic marketplaces

Organizations are capitalizing on new Internet technologies to engage in e-business. Given the uncertainties of today's e-business, we examine the role of institutional trust as an enabler of electronic marketplaces, drawing upon the lessons learned from traditional EDI via Value-Added-Networks. We apply these principles to develop a set of institutional trust-building facilitating conditions, such as (a) IT connectivity, (b) standards, and (c) uniform product descriptions. This research has implications for (1) the nature and role of institutional trust in e-marketplaces, (2) the strategic design of cost-effective trust-building mechanisms in e-marketplaces, and (3) an extension of the literature on institutional trust.