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Impersonal Trust in B2B Electronic Commerce: A Process View 243
There are two contextual forms of trust: impersonal created by institutional or
structural arrangements through signals, incentives and rational calculation (Shapiro,
1987), or familiarity arising from long-term relationships through repeated interaction.
The impersonal trust is the basis of the studies of trust from a rational cognitive
perspective, often game-theoretic, mainly based on the value of keeping a
reputation of honesty and competence (Dasgupta, 1988). Impersonal trust arises
when no familiarity between firms is available but some structural arrangements
allow subjective expectations of a firm’s credibility; on the other hand, familiarity
trust mainly arises from subjective anticipations of a firm’s benevolence based on
prior interaction. Therefore, the willingness of one firm to become vulnerable to
another firm’s actions depends both on the familiarity and impersonal types of trust.
While there is an extensive literature on the antecedents and consequences of
familiarity trust in buyer-supplier relationships (Doney and Cannon, 1997; Geyskens
et al., 1998), the literature on impersonal trust is in many aspects deficient, especially
at the empirical level.
Trust is formally defined as the subjective probability with which a firm
assesses that another firm will perform a particular transaction according to its
confident expectations in an uncertain environment. This definition captures three
important attributes of trust: first, the subjective probability embraces the fact that
trust is not an objective anticipation; second, the confident expectation encompasses
a possibility of a (mutually) beneficial outcome; finally, the uncertain
environment suggests that delegation of authority from one firm to another may have
adverse (harmful) effects to the entrusting firm in case of betrayal. Therefore, trust
is the subjective evaluation of the other firm’s characteristics based on limited
information (Beccera and Gupta, 1999). While trust could greatly improve the
effectiveness of the market (Arrow, 1974), both economists and sociologists
object that trust could ever become a stable coordinating mechanism because trust
fails when cooperation is less profitable than cheating (Granovetter, 1985).
However, given an institutional structure to encourage and safeguard cooperation,
impersonal trust that is trust based on institutional arrangements through signals and
incentives could perhaps be able to effectively coordinate economic activity.
The Nature of Impersonal Trust
An impersonal analysis of trust enables studying rational and contextual
cooperation, independent of familiarity trust that is usually irrational. The literature
on interorganizational relations provides two general characteristics of trust:
confidence or predictability in a firm’s expectations about the other firm’s behavior,
and confidence in another firm’s goodwill (Ring and Van de Ven, 1992). Moreover,
trust has been viewed as the expectation that a firm can be relied on to fulfill
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