The Moderating Role of Conflict on Feedback Mechanisms, Trust, and Risk in Electronic Marketplaces

Managing buyers’ trust and perceived risk through an effective feedback mechanism is central to electronic marketplace success (Pavlou and Gefen, 2004). This research note aims to include the role of conflict in our understanding of buyer behavior in online markets. Based on psychological contract violation theory, we propose that an experience of conflict causes buyers to shift their mindset from an emphasis on building trust to an emphasis on reducing risk. Accordingly, it is hypothesized that while the perceived effectiveness of the feedback mechanism mainly affects trust in the community of sellers among buyers who never experienced conflict with sellers (no-conflict buyers), it mainly influences perceived risk among those who did experience conflict (post-conflict buyers). It is also hypothesized that trust should have a greater effect on behavioral intentions among no conflict buyers, while perceived risk should have the greater effect among post-conflict buyers. Data from 466 buyers in eBay’s and Amazon’s auction marketplaces support these hypotheses, showing a shift from trust to perceived risk as the dominant factor as a result of conflict. Implications for understanding buyer behavior in electronic marketplaces are discussed.