The Role of Facilitating Conditions and Institutional Trust in Electronic Marketplaces

Given the uncertainties of e-business, this paper examines the role of institutional trust, which has been viewed as a key facilitator of electronic marketplaces (Pavlou, Tan, & Gefen 2003). In doing so, we draw upon the principles of research on traditional EDI via value-added-networks to develop a set of theory-driven institutional trust-building facilitating conditions; namely, (a) IT connectivity, (b) standards, (c) security, and (d) uniform product descriptions. This study has implications for (1) the nature and role of institutional trust in e-marketplaces, (2) the strategic design of trust-building mechanisms in e-marketplaces, and (3) an extension of the literature on institutional trust.