Lecture notes
Trust in online markets
- Institution
- The University Of Manchester (UOM)
This document covers the topic of trust and feedback in Social Media platforms with specific references to online markets.
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Trust, Reputation and RecommendationsThis lecture will explain the relevance of trust in social networks, the
online purchase of products/services etc.
The nodes on social media platforms are agents operating on it to
convey information to others. They could be private individuals,
organizations or even buyers/sellers. The different interactions
between the nodes help in forming links on such platforms. This
interaction could be in the form of comments/views/readers of the
post. It could be a friend or fan following you or even people who buy
and sell. In all these interaction, Exchange takes place. This exchange
could be of products (Ebay), information, and media files etc. When
this exchange takes place, some sort of a market is formed. It is
believed that the currency that enables this change is social capital,
which refers to the ‘closeness’ of people on such platforms.
In this scenario, it becomes important for us to ensure that we are
not being taken advantage of or our information is not being
misused. Here comes the role of trust, which safeguards us against
such mal practices.
Interaction between members promotes trust in two ways –
1. The pattern of interaction promotes long-term relationships; a
business partner whose trust has been rewarded is, all things
equal, more likely to return to do future business.
2. Information about individual reliability is transmitted by word
of mouth to third parties, some of who are prospective future
trading partners. In other words, trust promotes building of
newer relationships.
Online Markets
One of the great advantages of online markets is the opportunity to
trade with a larger, fluctuating set of partners. This means a lesser
reliance on long-term relationships. A clear example of this is data
collected from eBay over a five-month period; Resnick & Zeckhauser
(2002) found that 89% of all encounters were one-shot.
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