International Journal of Information Management: Ilyoo B. Hong

International Journal of Information Management 35 (2015) 322336
Contents lists available at ScienceDirect
International Journal of Information Management

journal homepage: www.elsevier.com/locate/ijinfomgt
Understanding the consumers online merchant selection process: The

roles of product involvement, perceived risk, and trust expectation
Ilyoo B. Hong
College of Business and Economics, Chung-Ang University, Bubhakkwan Bldg., Rm. 1404, 221 Heuksuk-dong, Dongjak-ku, Seoul 156-756, Republic of Korea
a r t i c l e
i n f o
Article history:
Available online 24 February 2015
Keywords:
Electronic commerce
E-marketplace
Situational involvement
Perceived risk
Trust expectation
a b s t r a c t
This article provides, through a survey of 295 college students, an empirical analysis of the effects of
situational involvement, perceived risk and trust expectation on the consumers choice of an online merchant. We conceptualized perceived risk as a multi-component construct, and examined the relationships
between the individual risk components and the other variables in the model under consideration. First
and foremost, the results indicated that consumers trust expectation in an online merchant is a predictor
of the consumers choice between an e-tailer and an e-marketplace. It was further revealed that situational involvement positively affected all the ve types of perceived risk, whereas only product performance
risk was positively related to consumers trust expectation. It may be inferred that the stronger product
performance risk perception, the higher trust a consumer expects in an online merchant to engage in
a transaction. The ndings have important practical implications for developing e-commerce strategies
not only for digital storefronts but also for online marketplaces that can help manage consumers trust
expectation and ultimately increase potential sales by mitigating related perceived risks involved in an
online purchase. The study concludes by providing some interesting avenues for future research.
2015 Elsevier Ltd. All rights reserved.
1. Introduction
Consumers differ in the way they make purchases. An audiophile
may make a bold (yet serious) decision to buy a top-of-the-line
home theater system, but may not be interested in replacing his
old and dilapidated car. By contrast, an automobile enthusiast may
not mind spending tens of thousands of dollars on a new Jaguar convertible, but may care little about his or her outdated component
system. In this regard, product involvement, which refers to the
extent to which a consumer perceives a product to be important
(Zaichkowsky, 1985), can help explain such differences between
individuals in terms of their purchase intentions.
Product involvement is an important factor that has considerable inuence on consumers purchase decisions, and has
thus attracted considerable attention from consumer behavior
researchers. High-involvement consumers tend to actively gather
and disseminate information on products or services that they are
interested in, whereas low-involvement consumers do not. Product involvement has been found to have considerable inuence
on other types of consumer responses, such as word-of-mouth
Tel.: +82 2 820 5549; fax: +82 2 813 8910.

E-mail address: ihong@cau.ac.kr
http://dx.doi.org/10.1016/j.ijinfomgt.2015.01.003
0268-4012/ 2015 Elsevier Ltd. All rights reserved.
communication (Bloch & Richins, 1983). Thus, product involvement is seen as a key motivator inuencing purchase decisions
(Richins & Bloch, 1986).
There exist studies that focus on the effects of product involvement and perceived risk on consumer responses that either precede
or follow the purchase decision stage; for example, information search and evaluation activity (Browne & Kaldenberg, 1997),
information processing (Bian & Moutinho, 2008), and information
dissemination (Bloch & Richins, 1983). However, little research has
been devoted to examining the role of these factors in the consumers decision on a merchant. In this regard, this study was
motivated by the need to understand how a consumer selects
an online merchant to buy from, given product involvement and
perceived risk.
How a consumer decides on a merchant in electronic commerce
is an important issue to investigate. It can provide useful insights
into ways of attracting potential online customers by allowing
us to understand what merchants consumers choose and what
merchants they avoid. Thus, outcomes of such research would
ultimately provide implications for developing strategies for
increasing the revenue of a merchant. Once what to buy has been
determined, who to buy from becomes the next question that
must be answered by a prospective consumer. The decision on
a merchant is in large part driven by purchase intention that is
I.B. Hong / International Journal of Information Management 35 (2015) 322336
inuenced by numerous factors such as value, brands, trust, among

others (Hong & Cho, 2011). Past research on consumer behavior
has focused on purchase intention as a primary predictor of a
consumers buy vs. not buy decision. However, this research
takes a unique approach to conceptualizing the construct by
measuring purchase intention as the preference for an e-tailer (or
a digital storefront) vs. e-marketplace. In the paper, we posit that
a consumers choice of an online merchant between an e-tailer
and an e-marketplace depends indirectly on the amount of risk
perceived by a consumer, and directly on the level of trust expected
of an online merchant, with regards to a given online purchase. For
example, will a consumer seriously considering the purchase of an
expensive Gucci bag perceive huge risk associated with online buying, and thus prefer a digital storefront to an online marketplace
to mitigate perceived risk? Will a consumer require greater trust
in an online merchant when the perceived risk of online buying
is high, and thus choose an e-tailer instead of an e-marketplace?
Past research has not addressed these research questions, and the
present study is one step toward closing that gap.
The purpose of this paper is to understand the process by which
a consumer chooses an online merchant by exploring the effects
of product involvement, perceived risk, and consumers trust
expectation. This research will consider one category of product
involvement known as situational involvement that encompasses
a heightened level of product importance for a specic purchase situation. We will examine this concept in greater detail subsequently
in Theoretical Background. To accomplish the research purpose,
we have conducted an empirical study to examine the relationships among situational product involvement, various types of
perceived risk, trust expectation, and the intention to buy from an
e-tailer (i.e. the preference for an e-tailer over an e-marketplace).
We introduced in this paper a new construct called trust expectation which refers to the extent to which a consumer expects a
potential merchant to be trustworthy with regards to a given online
purchase; this construct will be described in detail subsequently
in Sections 3.1 and 4.2. In our research model, trust expectation
is conceptualized both as an antecedent to the intention to buy
from an e-tailer and as a consequent of situational involvement and
of perceived risks. The rest of this paper is organized as follows:
Section 2 provides a literature review, focusing on the concepts
relevant to the study, and Section 3 discusses the research model
and hypotheses. Section 4 presents an empirical analysis, and Section 5 discusses implications, and some avenues for future research.
The present research contributes to the existing body of knowledge
by helping understand the factors inuencing a consumers online
merchant selection decision in the context of electronic commerce,
and by suggesting strategies that enable a digital storefront and an
e-marketplace to adequately manage consumers trust expectation
and ultimately increase potential sales.
2. Theoretical background
2.1. Product involvement
Despite some differences, previous studies denitions of product involvement have generally focused on the relevance of a
product. Product involvement has been dened as a consumers
perception of the relevance or importance of a product class,
based on his or her inherent needs, values, and interests (De Wulf,
Odekerken-Schrder, & Iacobucci, 2001; Zaichkowsky, 1985), and
it reects the internal motivational state of the consumer, encompassing some arousal, interest, or drive induced by the product
class (Bloch, 1981). Besides a psychological state, involvement is
also an attribute of a product. The level of product involvement
can be determined by product category. For example, clothing is
generally considered a high involvement product since consumers
323
often buy a clothing item for its symbolic meaning, image reinforcement or psychological satisfaction (Solomon, 1986), whereas coffee
is regarded as a low involvement product because its consumption
is less subject to the inuence of peers (Radder & Huang, 2008).
Product involvement has been dichotomized into enduring
involvement and situational involvement, based on whether it
concerns long- or short-term perceptions of the importance of
a product. Enduring involvement refers to the ongoing concern
about a product involved in the purchase situation (Richins & Bloch,
1986), and is often inuenced by the consumers previous experience with the product, and the value of the product (Houston
& Rothschild, 1978). On the other hand, Bloch and Richins (1983)
dened situational involvement as the temporary perception of the
products importance, based on the consumers desire to attain specic benets expected from the purchase and use of the product.
Thus, situational involvement may motivate the consumer to avoid
negative consequences associated with the purchase of a product. When a consumer buys a high-involvement product, he or she
examines the social and psychological environment surrounding
the purchase and consumption, and focuses on objective considerations, such as the performance and price of the project (Dholakia,
2001). Bloch and Richins (1983) suggested that situational involvement results from perceived risk.
Product involvement can have considerable inuence on consumers cognitive and behavioral responses to marketing stimuli
(Dholakia, 2001; Laaksonnen, 1994). First, product involvement is
positively related to information search and evaluation activity.
Highly involved consumers go through extended decision-making
processes, involving a series of sequential stages focusing on
searching for information and evaluating alternatives (Browne &
Kaldenberg, 1997). A consumer involved with a product is likely
to be motivated to process more information about the product, and take extra precautions in making purchase decisions,
investing more time and effort (Bian & Moutinho, 2008). In addition to processing more information, involved consumers may
disseminate product-related information through word-of-mouth
communication (Bloch & Richins, 1983). For example, a highly
involved smartphone enthusiast (an early adopter) may actively
provide written descriptions of personal experience with a new
smartphone model on his or her blog.
2.2. Perceived risk
Perceived risk has been recognized as one of the key motivators
in consumer behavior. Bauer (1960) stated that consumer behavior involves some risk, in that any action of a consumer leads to
consequences that he or she views with some uncertainty. According to Bauer, consumers develop ways to reduce the risk perceived
when participating in a transaction, by searching for information
that enables them to act with some condence under uncertainty.
Cox (1967) suggested that perceived risk is a function of (1) the
amount of money at stake in a purchase, and (2) the consumers
subjective feelings of certainty about the favorableness of purchase
consequences, highlighting the notions of loss and uncertainty.
E-commerce is more likely to introduce uncertainty, and hence
perceived risk, than traditional commerce (Chiu, Wang, Fang, &
Huang, 2012; Tan & Thoen, 2000). Online transactions occur under
anonymous, impersonal situations involving no face-to-face contact, and consumers have no opportunity to examine products
before their purchase. This mode of transaction can lead to the
perception of uncertainty concerning the consequences of the purchase on the part of the consumer. Some studies have paid attention
to the role of online merchants as a source of perceived risk in
transactions. According to Pavlou and Gefen (2004), sellers have the
potential to engage in opportunistic behaviors, including not delivering the right product at the right time as promised, and outright
324
Table 1
Types of perceived risk.
Researcher
Risk type
Jacoby and Kaplan (1972)

Taylor (1974)
Peter and Ryan (1976)
Stone and Gronhaug (1993)
Schiffman and Kanuk (1994)
Kurtz and Clow (1997)
Financial, product performance, physical, social, and psychological

Social/psychological and functional/economic loss
Financial, product performance, physical, social, psychological, and time/convenience
Economic, functional, physical, social, and psychological
Financial, safety, functional, social, psychological, and time loss
Social, psychological, nancial, and product performance
fraud, among others. Pavlou, Liang, and Xue (2007) pointed out
that online transactions may involve information asymmetry, in
which sellers have more information on the quality of products than
do consumers. Thus, concerns over sellers opportunistic behaviors may be triggered by consumers perception of uncertainty
(Grabner-Krauter & Kaluscha, 2003). An increase in information
asymmetry between a seller and a buyer increases the likelihood
of perceived risk for the buyer, and reduces the buyers purchase
intentions (Verhagen, Meents, & Tan, 2006). In addition, Hoffman,
Novak, & Peralta (1999) found that while providing buyers with
convenience, e-commerce can pose a serious threat to consumer
privacy.
Perceived risk in an e-commerce setting can be classied into
several components or types, according to the nature of the loss
that may result from transactions. For example, risk perceptions
may include concerns over delivery and return policies (Comegys,
Hannula, & Vaisanen, 2009), a lack of physical inspection opportunities (Cho, 2004), potential fraud (Hong & Cho, 2011), and exposure
to a computer virus. Table 1 lists various types of perceived risk
suggested by previous studies. Despite some differences in the classication scheme, there are four major types of perceived risk:
nancial risk, product performance risk, social risk, and psychological risk. In addition, online transactions typically entail delivery
risk, which refers to the fear of not receiving products on time
(Cases, 2002). Thus, the present study considers these ve types
of perceived risk as shown in Table 1.
2.3. Product involvement and perceived risk
Previous studies have suggested a close relationship between
product involvement and perceived risk, claiming that they are
conceptually similar. This conceptual similarity is attributed to the
role of involvement and risk in motivating consumer responses
(Dholakia, 2001). They both involve the notion of the importance
of a product class to the consumer (Bloch & Richins, 1983). Enduring involvement reects the importance of a product class, in
that it refers to the ongoing concern for a product class that can
be formed by its association with the consumers values or ego.
Likewise, perceived risk is linked to negative consequences of a
wrong purchase, thereby leading the consumer to perceive that the
product class and its purchase are important. Due to this similarity
in the two concepts, previous studies have produced mixed results
for the relationship between these two constructs. Perceived risk
has been conceptualized as an antecedent of product involvement (Bloch, 1981), or as a consequence of product involvement
(Venkatraman, 1989). The main difference in the way that the relationship between these two constructs is viewed lies in the concept
of product involvement, that is, does it refer to enduring involvement, or situational involvement?
First, enduring involvement may inuence risk perceptions with
respect to the purchase of a product. Venkatraman (1989) suggested that what motivates a consumer to be enduringly involved
with a product is either the enjoyment expected from the product, or the desire for knowledge or expertise related to the product.
As Houston and Rothschild (1978) indicate, enduring involvement
captures a solid relationship between an individual and a product.
Therefore, a consumer develops risk perceptions since a purchase

decision can affect the extent to which he or she can attain the goal
of obtaining the enjoyment from the use of the product or satisfying
the desire for knowledge related to the product. Consumers focus
not on avoiding a bad purchase, but on their potential satisfaction
with the purchase (Bloch, 1986). A consumers enduring involvement with a product is not likely to change over time. Purchase
risk perceptions are limited to the purchase occasion, and thus
do not inuence long-term enduring involvement (Venkatraman,
1989). The more the consumer enjoys a product and gains extensive
product knowledge, the less likely the consumer is to perceive the
risk associated with the purchase of the product. That is, enduring
involvement is a predictor of perceived risk.
Second, related studies suggest that perceived risk inuences
situational involvement. According to Bloch and Richins (1983),
the higher the level of perceived risk, the more likely the consumer is to temporarily perceive the importance of the product and
the purchase. Situational involvement increases if the consumer
can forsee negative consequences of a purchase (Bloch, 1981).
Perceived product involvement and risk are temporary in nature,
in that they disappear once the product purchase is completed.
Laurent and Kapferer (1985) found that perceived risk is a predictor of product involvement, and that it encompasses the following
two facets (Bauer, 1967): (1) the perceived importance of negative
consequences in the case of poor choices, and (2) the perceived
probability of making such mistakes. Given that perceived risk is
viewed as the loss associated with a bad purchase, consumers risk
perceptions are likely to lead to temporary product involvement,
which is important only in product purchase situations. When a
consumer is concerned that a poor product choice may fail to facilitate his or her personal goals, or address socially risky situations
(that is, when others view the product as unsuitable for the consumer), his or her situational involvement increases, and he or she
becomes more careful about purchasing the product (Rothschild,
1979).
On the other hand, some researchers reported contradictory
ndings on the relationship between perceived risk and situational
involvement. In her empirical study to examine product involvement and the ability to handle risk, Venkatraman (1989) found
that situational involvement has positive inuence on both the
uncertainty perceived in purchase and the importance assigned
to risk in purchase. Dholakia (2001) also reported that situational
involvement positively affected psychological, social, and functional risks. Houston and Rothschild (1978) state that situationally
involved consumers are, by denition, concerned about the severity of making a sub-optimal choice in a specic purchase situation.
People are instrumentally involved especially when they do not
actively seek product information on an on-going basis and thus
face transactional uncertainty at the time of purchase, thereby
increasing their pre-purchase anxiety (Bloch, Sherrell, & Ridgway,
1986).
2.4. Trust and perceived risk
Trust is one of the most highly challenging terms, whose concept is hardly agreed upon by researchers within diverse academic
disciplines, due to the differences in viewpoints about the concept

(Hong & Cho, 2011). Mayer, Davis, and Schoorman (1995) dene
trust as the willingness of a party to be vulnerable to the actions
of another party, based on the expectation that the other will
perform a particular action important to the trustor, irrespective
of the ability to monitor or control that other party. In electronic
commerce, trust plays an important role when a consumer makes
purchases, because a purchase decision has to be made in the face
of uncertainty.
The relationship between perceived risk and trust is as intriguing as that between product involvement and perceived risk. These
two constructs are closely related, but it remains unclear how
they are related. A number of studies have empirically validated
the negative effect of trust on perceived risk. For example, Pavlou
(2003) and Jarvenpaa, Tranctinsky, and Vitale (2000) reported that
an increase in consumer trust in an online merchant can reduce
perceived risk. However, Mayer et al. (1995, p. 711) noted that it
is unclear whether risk is an antecedent to trust, is trust, or is an
outcome of trust.
Johnson-George and Swap (1982) stated that the willingness
to take risks may be one of the few characteristics common to all
trust situations. The presence of trust implies the acceptance of a
certain degree of risk of potential losses when the expected outcome is positive (Williamson, 1993). Although one may choose to
trust in another if the risk that one has to take is acceptable, one has
no choice but to give up ones trust if that risk exceeds an acceptable level. That is, perceived risk can be an important predictor of
ones decision to trust another (Hong & Cha, 2013). Further, Deutsch
(1973) postulated that one chooses to trust another, if the subjective probability of a positive outcome is higher than that of a
negative outcome. That is, one will not trust another, if the risk is
expected to exceed the benet. This theory applies to e-commerce.
If a consumer associates a high level of risk with an online transaction, then the level of trust in the online merchant decreases, and
the need to control the transaction increases (Olivero & Lunt, 2004).
That is, the perception of a high level of risk may reduce the level of
trust in the online transaction. Olson and Olson (2000, p. 43) stated
that trust varies with the (risk) situation.. . . we might be more
likely to leave our laptops in a Microsoft conference room than in
an airport lounge. One is more likely to trust another if the stakes
are relatively low, or the same as for the trustee, or if the potential
loss is minimal (Olson & Olson, 2000).
In sum, it can be hypothesized that perceived risk has a signicant negative effect on trust. This intuitive relationship between
perceived risk and trust will be incorporated into our research
model. However, our research model will employ a variant of the
trust construct called trust expectation, which we will describe
subsequently in the Research Model section.
2.5. E-tailers vs. e-marketplaces

Researchers of Internet business models (for example,
Applegate, 2001; Rappa, 2002; Timmers, 1998) have suggested
that two categories of business models are concerned with selling
products or services to consumers online namely, e-tailers and
e-marketplaces, as summarized in Table 2.
325
E-tailers are independent digital storefronts that are essentially

the online version of the traditional stores designed to sell to
consumers, and examples of this category of merchants include
Amazon.com, Bestbuy.com and the Apple Store. These storefronts
are responsible for executing an entire sales transaction, from taking an order, to shipping the ordered product, to processing returns
and exchanges. On the other hand, e-marketplaces are market makers involving intermediaries that match buyers with sellers. The
intermediaries are basically online brokers that provide a webbased transaction system, and services that allow buyers and sellers
to transact with one another. When a transaction is complete, the
e-marketplace charges a brokerage fee to the seller as a percentage of the transaction amount. There can be multiple sellers within
an e-marketplace who sell an identical item, and for that reason
there exists competition among the sellers, which tends to drive
the prices down. Well-known examples of e-marketplaces include
E-bay, Amazon.com marketplace, and NASDAQ.
The related literature suggests that, in some regards, the two
types of online merchants exhibit fundamental differences. The
rst difference between an e-tailer and an e-marketplace lies in
consumers risk perceptions. E-marketplaces can introduce greater
risks than digital storefronts, for a few reasons. First, with online
marketplaces, there exists the risk of buying from a community
of unknown sellers, and it can act as an obstacle for a buyer
(Kim & Ahn, 2006). Second, e-marketplaces often consist of SOHO
(small ofce home ofce) sellers, who process a limited volume of
transactions daily, and handle returns or exchanges with limited
manpower resources. Third, the e-marketplace business model
involves two parties who act to serve customers for transactions:
namely, an intermediary, and sellers. For that reason, it may often
become obscure who is responsible for problems that may occur in
the course of order fulllment (Hong & Cho, 2011). Besides, multiple sellers within an e-marketplace independently perform their
own sales and promotional activities, and this creates the risk of a
seller behaving in an opportunistic behavior to take advantage of
the buyers vulnerability to the seller.
The second way the two types of merchants differ is in consumer trust. With an e-tailer, a buyer makes a purchase from a
single seller, and thus transactions involve trust in dyadic relationships, that refer to one-to-one relationships between sellers
and buyers (Pavlou & Gefen, 2004). On the other hand, a buyer in
e-marketplaces has to decide on whom to purchase from, since
there are multiple sellers. Therefore, consumers transacting in
e-marketplaces face two types of trust: that is, trust in an intermediary, and trust in a community of sellers within the e-marketplace.
Consumers may develop separate beliefs of trustworthiness for the
two entities, although trust may eventually transfer from an intermediary to a community of sellers (Hong & Cho, 2011).
Finally, digital storefronts differ from online marketplaces in
the structure of transaction costs. Online stores like Dell.com or
Amazon.com execute transactions internally, rather than relying
on third-party service providers. Therefore, consumers may perceive less uncertainty and risk with regards to the processing of
sales transactions, and nd it more convenient to communicate
with a single merchant. Despite the relief and convenience enjoyed
by consumers, these online stores will face greater costs associated with providing integrated services, including not only fullling
Table 2
Business models associated with E-tailers and with e-marketplaces.
Category of models
Applegate (2001)
Rappa (2002)
Timmers (1998)
E-tailers
Retailer
E-shop
E-marketplaces
Marketplace
Exchange
Merchant
Manufacturing
Brokerage
Third party marketplace
326
orders, processing returns and exchanges, and after-sales customer

service, but also providing a Web-based sales automation system.
This operational overhead would contribute to an increase in prices
(Liang & Huang, 1998; Kim & Ahn, 2006). On the other hand, online
marketplaces have great potential for reduced search costs on the
part of buyers, which can have an important impact on market
equilibrium (Bakos, 1997). This would increase competition among
sellers within an e-marketplace, and enable e-marketplaces to sell
at lower prices than digital storefronts.
3. Research model and hypotheses
studies, a trust construct is used that measures perceptions of the

trustworthiness of a merchant whom the consumer is considering
a purchase from. It is assumed that a merchant has already been
chosen by the consumer to transact with. However, the present
research employs a slightly different construct, which we term
trust expectation. For the purpose of the paper, we dene trust
expectation as the extent to which a consumer expects a future
merchant to be capable of successfully addressing the risk elements associated with the purchase of a product. This construct
is applicable to a situation where a consumer has not decided upon
a merchant, and therefore has no way of describing how much trust
he or she has placed in a merchant.
3.1. The trust expectation concept

3.2. The research model
The consumer behavior literature in general suggests that the
consumer purchase decision process is comprised of ve stages,
including need recognition, search for alternatives, evaluation of
alternatives, choice/purchase making, and post-purchase evaluation (Engel et al., 1978; Hawkins and Mothersbaugh, 2012). The
choice/purchase making phase in the model is concerned with buying product value, and there are four decisions made in this phase of
a consumers decision process; namely, (1) product/package, (2) a
store to buy the product, (3) purchase method, and (4) when to buy
the product. Likewise, a consumer needs to decide upon a product
and an online store, before making an online purchase.
Meanwhile, online transactions occur in remote, impersonal
environments, where buyers are not in face-to-face contact with
a seller, and cannot physically examine the products under consideration. This imposes risk upon buyers (Garbarino and Strahilevitz,
2004). In addition, the type of product being purchased online can
become a source of risk, since automobiles, for example, have the
potential for greater nancial loss than music CDs. Anxiety results
when consumers cannot be certain about the purchase outcome,
and perceive risk. In the event that the anxiety becomes an obstacle
to the intention to purchase, the consumer takes certain actions to
reduce risk, such as avoiding purchase decisions, gathering more
information, and looking for national brand names and products
with warranties (Dowling and Staelin, 1994). In e-commerce situations, a consumer who has made up his or her mind to make a risky
purchase is likely to try to reduce risk of possible loss. Thus, one
way for a consumer to address perceived risk is to require as much
trust of a vendor as possible, and consequently buy from a highly
trustworthy merchant, so that the transaction can be safeguarded.
That is, choosing the right merchant who can successfully meet
the trust expectation of a merchant is likely to help relax the risk
perceptions. Therefore, based on the existing literature, we can diagrammatically show the three-stage process of choosing an online
merchant, as in Fig. 1.
It is worthwhile to distinguish between trust in a given merchant and trust in an undecided merchant. In most trust-related
Decide on how much

trust is expected of a
merchant
Decide on what
product to buy
Choose a product that

provides greatest
value
Ensure that the

product chosen best
meets the consumers
needs
The present paper examines the role of situational involvement, perceived risks and trust expectation in consumers choice
of an online merchant. As discussed in the literature review section, some related studies (e.g. Bloch, 1981; Bloch & Richins, 1983;
Laurent & Kapferer, 1985; Rothschild, 1979; Venkatraman, 1989)
have examined the relationship between product involvement and
overall perceived risk. However, the present study focuses on the
individual relationships in an e-commerce setting between situational involvement and various types of perceived risk, not overall
perceived risk. The study follows the classication scheme suggested by Jacoby and Kaplan (1972), who classied perceived risk
into ve categories (nancial, product performance, physical, psychological, and social), and adapts them for the e-commerce setting,
by substituting delivery risk for physical risk, as shown in Fig. 2.
Our speculation is that situational involvement is likely to have
differential effects on the ve types of perceived risk. Depending
on the product class being considered for online purchase, certain
risks will be perceived more strongly than other risks. For example,
a consumer considering an online buying of a brand name digital piano will have intense perceptions of nancial and delivery
risks, but hardly experience product performance risk as he or she
develops rm trust in the product quality based on the reputation.
In addition, as we have seen in the literature review, if a consumer associates a high level of risk with an online transaction, then
the level of trust in that transaction decreases. It implies that strong
risk perceptions or strong situational involvement have the potential to motivate the consumer to mitigate anticipated risks and
restore trust in the transaction by choosing a highly trustworthy
merchant. Thus, the present study examines the effects of various
types of perceived risk, and of situational involvement, on the level
of trust in a merchant required by consumers.
Furthermore, the level of trust demanded by a consumer is
established as a predictor of that consumers choice of an online
merchant between an e-tailer and an e-marketplace. This postulation is based on the observation that a consumer constantly strives
Decide on which
merchant to buy
from
Assess product
involvement
Explore merchant
candidates
Assess product
purchase risk
Determine trust
expectation to secure
the purchase
Choose an online
merchant who
satisfies the trust
expectation of the
consumer
Fig. 1. The online merchant selection process.
327
Financial risk
H1-1
H1-2
Performance risk
H2-1
Delivery risk
H2-2
H2-3
H1-3
H1-4
Psychological risk
H2-4
Social risk
H2-5
H1-5
Situational
involvement
Trust
expectation
H3
H4
Intention to buy
from an e-tailer
Fig. 2. The research model.
to safeguard his or her transaction by buying from a trustworthy

merchant, given that the trust expectation is fairly high. Since emarketplaces tend to be somewhat riskier than e-tailers (Hong &
Cho, 2011), the consumer is likely to make a decision on whom to
buy from, depending on the trust expectation.
Drawing from the above line of reasoning, we propose a research
model for the present study, as shown in Fig. 2. It is rooted
on the two underlying theoretical frameworks described earlier,
namely the ve-component classication of perceived risk and the
dichotomy of online merchant into e-tailers and e-marketplaces.
The model considers the following key constructs: situational
involvement, the ve types of perceived risk, trust expectation, and
the intention to buy from an e-tailer. As shown in Fig. 2, the role
of trust expectation is both an antecedent to the intention to buy
from an e-tailer and a consequent of situational involvement and
of perceived risks. The hypotheses, H1-1 to H1-5, address the relationships between situational involvement and the ve types of
perceived risk; H2-1 to H2-5 focus on the relationships between
the ve types of perceived risk and trust expectation; and H3 and
H4 consider the effect of situational involvement on trust expectation, and the effect of trust expectation on the intention to buy
from an e-tailer, respectively.
3.3. Hypothesis development
3.3.1. Product involvement and perceived risk
Situational involvement reects a temporary perception of
product importance (Bloch & Richins, 1983, p. 72) tied to a
specic situation such as a purchase occasion (Houston &
Rothschild, 1978). Perception of heightened product importance is
driven by short-term goals that are related to a purchase or a usage
(Bloch & Richins, 1983). Situational involvement is temporary in
nature in that it disappears when the purchase is completed (Bloch,
1981), and is heightened when the stakes associated with a purchase outcome (i.e., perceived risk) are high (Bloch, 1981; Laurent
& Kapferer, 1985). Thus the two constructs are closely related to
each other. As stated in the Literature Review section, a consumer
who is motivated to avoid negative consequences associated with a
wrong purchase of a given product becomes temporarily involved
with the purchase. Since he or she will not have an enduring interest
in the product, the consumer is likely to lack in product knowledge and thus to feel uncertain about the purchase of the product.
This uncertainty often becomes the source of risk perceived by consumers (Hong & Cho, 2011). As Ring and Van de Ven (1994) note,
the risks inherent in a transaction increase in proportion to reductions in time, information, or controllability. Based upon the above
theoretical grounds, we propose the following hypothesis:
H1. Situational involvement is positively related to perceived risk.
Based on the same theoretical line of reasoning, situational involvement is also likely to be positively related to each
component of perceived risk. We will show how situational

involvement can positively inuence nancial, product performance, delivery, psychological, and social risks using a gold
necklace example. We assume that a male consumer plans to buy a
gold necklace online for a gift to his ance. The necklace example
ts the denition of situational involvement, since the consumer
is likely to feel that the right purchase of the necklace is of prime
importance and thus nd it necessary to invest a large amount of
time and effort to ensure to make an optimal buy of the product
that will play a big role in enhancing the romantic relationship
between the two.
First, nancial risk refers to the possibility of monetary loss
associated with an online transaction. The prospective buyer who
is temporarily involved with a new necklace product is likely to
have more concerns over monetary loss possibly resulting from
a sellers opportunistic behavior in the online purchase of the
product, than would an uninvolved individual. The buyers prime
concern here is with avoiding a sub-optimal buy of a necklace
that may lead to nancial loss. Pavlou et al. (2007) state that in
case the sellers behaviors cannot be easily guaranteed or monitored, buyers may fear that the seller may act opportunistically
by cheating quality, masquerading true identity, or not acknowledging product warranties (Mishra et al., 1998). So we have the
following sub-hypothesis:
H1-1.
risk.
Situational involvement is positively related to nancial
Second, product performance risk is the possibility of the

ordered product failing to perform to the consumers expectations.
This situationally involved consumer would be much worried that
the new necklace ordered might not perform to his expectations,
until he nally receives and tests it out. As Richins, Bloch, and
McQuarrie (1992) suggest, when a product is important to a consumer, the stakes associated with its purchase increase. Thus, the
consumer may fear that the necklace product might be defective,
be visually unattractive, or not be genuine. Based on this line of
reasoning, we propose the following sub-hypothesis:
H1-2. Situational involvement is positively related to product performance risk.
Third, delivery risk refers to the likelihood that the ordered product might not be correctly delivered. The male consumer in our
example has a denite goal to make his ance feel cared for and
strengthen his relationship with her by presenting the gold necklace gift, and thus, wants to make sure that the ordered necklace
product gets delivered correctly to enable the achievement of the
goal. This heightened motivation makes the consumer fear about
possible negative consequences such as the necklace product not
arriving on time or being delivered to a wrong address. Excessive
concerns about incorrect or untimely delivery may make it seem
328
unlikely to achieve the goal and ultimately cause him to cancel his
order. Thus, we have the following sub-hypothesis:
H1-3.
risk.
Situational involvement is positively related to delivery
Fourth, psychological risk is dened as the possibility that

there is an insufcient t between the purchased product and the
consumers self-image or self-concept. The gold necklace buyer
would be concerned that he might end up making a suboptimal
choice of the gold necklace product because he is uncertain about
how successfully the chosen necklace will support his ances
needs and preferences. Therefore, the buyer who ensures to make
an optimal buy of the gold necklace is likely to fear that psychological discomfort may result from possible mismatch between
the product and his ances preferred necklace style, and thus
that the ordered product might fail to achieve this consumers
short-term goal. The consumer may reduce his apprehension to
some extent by showing his ance the chosen products image
online. Nevertheless, some fear will still remain because online
transactions do not provide consumers with the ability to examine
or test the product under consideration (Hong & Cho, 2011). Thus,
we may propose the following sub-hypothesis:
H1-4. Situational involvement is positively related to psychological risk.
Finally, social risk is the likelihood that the purchased product
inuences others view of the consumer in such a way to make
the consumer feel uneasy. This consumer with a high level of situational involvement, perceiving intense social risk, is likely to be
concerned that his acquaintances may nd the new gold necklace
unsuitable for his ance because of its improper size or gaudy
design. Once acquired, the necklace will be visible to the significant others around his ance who may become very sensitive
to their thoughts and opinions. The gold necklace buyer would be
particularly concerned over the possible discrepancy or incompatibility between his choice of the product and the potential choices
by their peers or friends. Therefore, we propose the following subhypothesis:
H1-5.
Situational involvement is positively related to social risk.
3.3.2. Perceived risk and trust expectation

As discussed in the Literature Review, existing research ndings
support the observation that strong perceptions of risk are likely
to negatively affect consumers trust in online transactions. Consumers would choose to trust a merchant when the perceived risk
is within a certain limit. Thus, they would be reluctant to trust the
merchant if the risk is too high to accept. For example, provided that
a consumer can foresee potential losses associated with a transaction, there is a high chance that he or she will stop placing trust in
the transaction, and look for an alternative course of action. Thus,
it can be speculated that consumers are likely to prefer online merchants who are trustworthy enough to reduce perceived risk. This
line of reasoning suggests that perceived risk is positively related
to consumers trust expectation. Simply put, worries over an online
transaction will most likely lead a consumer to choose a merchant
who can successfully meet tough requirements for trust in a merchant. By ensuring to purchase from a trustworthy merchant, the
consumer addresses his or her concerns over potential losses. In
this regard, we propose the following hypotheses:
H2. Perceived risk is positively related to a consumers trust
expectation.
The same line of reasoning applies to the ve types of perceived
risk. Whether a consumer experiences an intense perception of
nancial, product performance, delivery, psychological, or social
risk, the consumer will be inclined to reduce the risk by demanding high trust on the part of an online merchant, thereby lessening
the likelihood that losses will occur as a result from buying from a
wrong merchant. Below is given an account of how each of the risk
components relates to trust expectation, using the gold necklace
example.
First, to adequately deal with concerns over a monetary loss
associated with an online purchase of a gold necklace as a gift for
his ance, this consumer will ensure to choose an online jewelry
store that is trustworthy and is not likely to behave in an opportunistic manner. The consumer will be motivated to mitigate the
perceived nancial risk to ultimately reach the state of psychological equilibrium (Cases, 2002). One sure way to mitigate such a risk is
to ensure that the consumer buys from a jewelry store trustworthy
enough to relieve the risk being perceived. Therefore, we propose
the following sub-hypothesis:
H2-1. Financial risk is positively related to a consumers trust
expectation.
Second, a consumer worrying that the gold necklace product
may not perform as expected is likely to make sure that the product is purchased from an online jewelry merchant who has good
will and is believed to sell genuine and quality necklace products
only. In order to reduce the perceived product performance risk,
the consumer will most likely gather information about the reputation of the necklaces brand and about the performance of the
necklace product chosen by the consumer by accessing customer
reviews or expert reviews available online. Such information will
help the consumer manage the risk and determine the trustworthiness of the online merchant. Therefore, we propose the following
sub-hypothesis:
H2-2. Product performance risk is positively related to a consumers trust expectation.
Third, if the consumer fears that the ordered gold necklace might
not be delivered correctly, he will make sure that a trusted merchant is chosen who is most likely to use a standardized operational
procedure to avoid human errors and enable correct delivery. If the
stakes associated with incorrect or untimely delivery of a product
are high, then the consumer will take necessary measures to relieve
the delivery risk by extensively searching for an established jewelry merchant who has necessary resources to deliver orders right.
Therefore, we propose the following sub-hypothesis:
H2-3. Delivery risk is positively related to a consumers trust
expectation.
Fourth, the consumer with strong concerns over possible mismatch between the ordered gold necklace and his ances personal
preferences for jewelry products will take necessary measures to
address his psychological risk. He will check with his ance to nd
out her favorite necklace styles, contact the jewelry merchant for
product inquiry, or take time to go over product descriptions and
customer reviews on the merchant website, in order to ultimately
ensure that the features and specications of the gold necklace
product under consideration are consistent with his ances own
needs or self-image. This is how he can reduce the perceived
psychological risk down to a manageable level by increasing the
trustworthiness of the merchant to buy from. Therefore, we propose the following sub-hypothesis:
H2-4. Psychological risk is positively related to a consumers trust
expectation.
Finally, if the consumer is worried that the acquaintances of his
ance might regard the new gold necklace product as unsuitable
for his ance, he will nd it a top priority to buy from a professional
jewelry merchant who has the knowledge to recommend a right
product for the individual consumer. The greater the perception

of social risk, the stronger the need to control that perceived risk
(Olivero & Lunt, 2004). And to mitigate the social risk, the consumer
will be inclined to raise the level of trust in the jewelry merchant
to buy from. Therefore, we propose the following sub-hypothesis:
H2-5. Social risk is positively related to a consumers trust expectation.
3.3.3. Product involvement, trust expectation, and the intention
to purchase from an e-tailer
A consumer who is situationally involved with a product is likely
to nd both the product and its purchase important. Thus, the consumer is likely to be motivated to make a right purchase by avoiding
a wrong buy (e.g. low-quality or overpriced products, or those with
poor after-sales service). For this, the consumer requires an appropriate level of trust in the merchant to avoid a wrong buy, and to
actively search for, and evaluate product-related information from
various sources, including the Internet. In addition, social judgment
theory researchers (e.g. Sherif, Sherif, & Nebergall, 1965) theorized
that individuals who are highly involved with an issue are more
likely to evaluate all possible positions, therefore resulting in more
restricted latitude of acceptance. Because discrepant positions are
less tolerable when a person is highly involved, more messages
will fall into the latitude of rejection, which under this condition is
wider. According to this theory, messages falling within the latitude
of rejection are unlikely to successfully persuade. Therefore, highly
involved individuals will be harder to persuade (Sherif & Hovland,
1961; Sherif et al., 1965). Applying this nding of the social judgment theory to the electronic commerce setting leads us to posit
that the more involved a consumer is with regards to a product
class, the less likely the consumer is to trust an average merchant,
and therefore, the greater trust he or she is to expect of a merchant
to buy from. This implies a positive relationship between situational involvement and trust expectation. Based on this theoretical
ground, we propose the hypothesis given below.
H3. Situational involvement is positively related to the trust
expectation of a merchant.
If a consumer requires a high level of trust in an online merchant,
then what behavioral response will he or she manifest? If the consumer has to choose between e-tailers and e-marketplaces, then
he or she is likely to prefer e-tailers. The key distinction between emarketplaces and online storefronts lies in the role of the merchant,
that is, e-marketplaces act as an intermediary between sellers
and buyers, whereas storefronts (or e-tailers) are responsible for
selling to consumers (Hong & Cho, 2011). Previous studies found
that e-marketplaces tend to be riskier than e-tailers (Kim & Ahn,
2007). E-marketplaces have limited control over sales transactions
in which sellers fulll online orders. For this reason, buyers nd
e-tailers more trustworthy than e-marketplaces. This suggests that
the higher the level of trust expected of an online merchant, the
more likely the consumer is to purchase from an e-tailer, than from
an e-marketplace. Further details on the distinction between the
two types of online merchants are given in Subsection 2.5. In this
regard, we propose the following hypothesis:
329
the sample from an undergraduate management information systems class taught at a major university in Korea by inviting the
students in the class to take the survey on a voluntary basis. Each
participant was rst asked whether he or she has ever shopped
online, and invited to answer a questionnaire, only if the participant
says to have the experience of online shopping, in which his or her
involvement with each of eight product classes was assessed. The
product classes include beverage, slipper, skin lotion, detergent,
toilet tissue, camera, notebook computer, and TV.
Of a total of 32 responses that had been collected, 25 valid
responses were taken for analysis after seven invalid responses
had been discarded. Based on the responses from the preliminary
survey, we computed the mean value of product involvement
rated on a ve-point scale (1 = least involved; 5 = most involved)
for each of the eight product classes, and used these values
to classify each product class either as high-involvement or as
low-involvement. It was revealed that high-involvement products turned out to be notebook computer, skin lotion, camera,
and TV; and low-involvement products were slipper, beverage,
toilet tissue, and detergent. The reason why we identied four
high-involvement and four low-involvement product classes was
that we had to make sure that data collected from the main
survey can cover a broad range of product classes, from the one
with low involvement to the one with high involvement. We also
revised and rened the questionnaire items containing ambiguous
expressions for improved clarity.
Then the main survey was conducted with a sample of students
from December 13, 2010, to December 21, 2010. University students may differ from general e-commerce consumers in some
regards. First, the income level is different. While e-commerce consumers are usually people who either make or have money to
spend to make purchases, students are likely to have a limited
amount of money for online shopping. Second, university undergraduate students are usually in their twenties, whereas general
online consumers range from 20s to 60s, or even to 70s. Despite
these differences, students are typically skillful in Internet usage,
and have condence in online shopping. Moreover, an increasing
number of university students today shop online on a regular basis
(Comegys et al., 2009). For these reasons, university students can,
to some extent, represent the general population of e-commerce
consumers.
The respondents for the main survey consisted of 336 students
enrolled in three sections of the e-business class at the same university. Each respondent was asked to answer a series of online
questions concerning a given product, under the assumption that
they need to buy the product online. The main survey questionnaire
referred to one of the eight product classes that were each assigned
42 participants on a random basis. A total of 302 responses were
collected including seven incomplete or inadequate responses,
and 295 valid responses were used for subsequent data analysis. It was found that 161 respondents were associated with high
involvement products, while 134 with low involvement products.
Table 3 provides the prole of the respondents. A statistical analysis was conducted using SPSS WIN 17.0 and AMOS 18.0, and the
hypotheses were tested using the structural equation modeling
method.
H4. The trust expectation of a merchant is positively related to

the intention to purchase from an e-tailer.
4.2. Measures
4. Methodology
4.1. Procedure and the sample
A preliminary survey with 25 college students was conducted
to identify high-involvement and low-involvement product classes
and to ensure that the survey instrument is functional. We took
All the measures employed in this study were rated on a vepoint Likert-type scale that ranged from strongly disagree to
strongly agree. The semantic differential scale originally used in
Zaichkowsky (1994) was converted to the Likert type to avoid possible confusion among the respondents. Since all other scales were
of Likert type, we were concerned that respondents would simply
330
Table 3
The respondents prole.
Attribute
Value
Frequency
Percentage
Gender
Male
Female
Twenties
Thirties
Below USD 500
USD 5001000
Above USD 1000
Below 7 years
710 years
Over 10 years
182
113
294
1
173
64
58
18
172
105
61.7
38.3
99.7
0.3
58.6
21.7
19.7
6.1
58.3
35.6
Age groups
Monthly income
Length of Internet
experience
regard the items for involvement as all referring to the scale on a

continuum between strongly disagree and strongly agree.
First, situational involvement was dened as the consumers
temporary perception of product importance that accompanies
a particular purchase situation based on the consumers desire
to meet extrinsic goals deriving from the purchase and/or usage
of the product (Bloch & Richins, 1983; Richins et al., 1992). In
this study, the scale of situational product involvement is based
on Zaichkowsky (1994) and consists of seven key items, including important, excited, interesting, needed, means a lot,
uninvolving, and fascinating. Of these items, uninvolving was
negatively keyed items (reverse-scored), whereas the remaining
items were positively keyed items. Situational involvement was
measured using items that focus on assessing the extent to which
a consumer perceives heightened product importance in order to
satisfy short-term goals for a particular purchase situation. Thus,
we provided a box statement ahead of the related items which
states: Assume that you are now considering an online purchase of
<product class>, and answer the following questions based on this
particular purchase situation; <product class> is one of the eight
product classes used in our survey.
The perceived risk construct was not measured as an overall
perceived risk, but as individual components of perceived risk, and
thus, ve types (nancial, product performance, delivery, psychological, and social) of perceived risk were considered (Jacoby &
Kaplan, 1972). Financial risk was dened as the likelihood of some
nancial loss resulting from overpriced products/online fraud, or
from unexpected expenses (e.g. a 15% restocking fee). Product performance risk was dened as the likelihood of problems associated
with purchasing unfamiliar brands or defective products. Delivery
risk was dened as the likelihood of a delivery problem (e.g. the late
delivery of products, the delivery of a product to a wrong address,
and the delivery of a wrong product). Psychological risk was dened
as the likelihood of an insufcient t between the purchased product and the consumers self-image or self-concept. Social risk was
dened as the likelihood of the purchased product inuencing others view of the consumer.
Trust expectation, a new construct, was introduced as an
antecedent to the intention to buy from an e-tailer. This variable was dened as the extent to which a consumer expects that
the online merchant should successfully address the risk elements
associated with the purchase of a product. Trust expectation was
used to measure the degree of trustworthiness required of the
online merchant, for the consumer to willingly participate in a
transaction with a minimum level of perceived risk. Six items were
used to measure this construct: two for the competence of an online
merchant, two for their benevolence, and two for their integrity.
Finally, the intention to buy from an e-tailer measured the consumers preference for an e-tailer over an e-marketplace. We are
taking the unusual approach of measuring purchase intention as
the relative preference for e-tailer vs. e-marketplace, in order to
gauge the consumers risk-taking behavior involved in choosing
an online merchant. As we mentioned in the literature review, we

expect a consumer to choose an e-tailer over an e-marketplace,
provided that the online purchase involves risks and that the consumer wishes to mitigate the risks. This construct was measured
by a single item, designed to rate the extent to which a respondent prefers e-tailer to e-marketplace, ranging from 1 (strongly
disagree implying preference for e-marketplace) to 5 (strongly
agree implying preference for e-tailer).
5. Results
5.1. Reliability and validity
5.1.1. Reliability of the measurement model
SPSS 17.0 was used for internal consistency, and the reliability of the measurement items was tested using Cronbachs alpha.
In social science, the reliability of a measure is supported if Cronbachs alpha is 0.7 or higher (Nunnally, 1978). The results indicate
that the lowest coefcient was 0.834; the highest coefcient
was 0.957; and all the coefcients exceeded 0.8, demonstrating sufcient reliability for all the variables. Table 4 shows Cronbachs
results for the measures.
5.1.2. Validity of the measurement model
Validity refers to whether questions or empirical indicators
are actually measuring what they are designed to measure. Amos
18.0 was employed for a conrmatory factor analysis of the
unidimensionality of the measures. Unidimensionality refers to
the property that a scales items measure only one dimension or
concept at a time.
For the analysis of unidimensionality, three types of validity were tested: convergent validity, discriminant validity, and
nomological validity. Convergent validity refers to the extent to
which a measure is similar to (converges to) other measures that
it theoretically should also be similar to. If for each and every
scale item, the standardized factor loading exceeds 0.7, average
variance extracted (AVE) exceeds 0.5, composite reliability value
exceeds 0.7, and C.R. (critical ratio) value exceeds 1.96, then there
exists convergent validity (Hair, Black, Babin, & Anderson, 2010).
As shown in Table 6, all the scale items satisfy the given criteria,
demonstrating sufcient convergent validity. Discriminant validity
refers to the extent to which a measure is not similar to (diverges
from) other measures that it theoretically should not be similar to.
In general, there is discriminant validity if AVE values for all scales
exceed squared inter-construct correlation coefcients. As shown
in Table 5, the highest correlation coefcient was 0.757 (between
product performance risk and delivery risk). In addition, as shown
in Table 6, the square of this coefcient was less than 0.630, the
minimum AVE, demonstrating sufcient discriminant validity.
Table 4
Reliability of the measurement model.
Scale
Number of
items (1)
Number of
Items (2)
Cronbachs
Financial risk
Product performance risk
Delivery risk
Psychological risk
Social risk
Trust expectation
7
3
3
3
3
3
6
5
3
3
3
2
3
5
0.957
0.846
0.874
0.834
0.926
0.865
0.930
Notes: Number of items (1) and number of items (2) respectively indicate the number
of items composed for each scale before and after eliminating items that contribute
to low scale reliability. The results show that situational involvement involves two
items (i.e., needed and uninvolving) eliminated; psychological risk has one item
(i.e., anxious) eliminated; and trust expectation involves one item (i.e., necessary
capabilities and resources) eliminated.
331
Table 5
Correlation matrix.
Variables
SI
FR
PPR
DR
PR
SR
TE
IBE
Financial risk
Delivery risk
Psychological risk
Social risk
Trust expectation
Intention to buy from e-tailer
1
0.549
0.587
0.477
0.105
0.249
0.343
0.352
1
0.723
0.682
0.181
0.366
0.247
0.291
1
0.757
0.100
0.278
0.367
0.391
1
0.166
0.340
0.249
0.292
1
0.472
0.017
0.027
1
0.079
0.099
1
0.319
Table 6
Conrmatory factor analysis of the measurement model.
Latent variables
Item variable
Factor loadings
Standardized factor
loadings
C.R. (t-value)
AVE
Composite reliability
SI1
SI2
SI3
SI4
SI5
FR1
FR2
FR3
PPR1
PPR2
PPR3
DR1
DR2
DR3
PR1
PR2
SR1
SR2
SR3
TE1
TE2
TE3
TE4
TE5
IBE
1.000
1.026
0.896
0.907
1.028
1.000
1.205
1.343
1.000
0.701
0.741
1.000
1.105
1.092
1.000
0.844
1.000
0.819
0.787
1.000
1.038
1.021
0.847
0.769
1.000
0.93
0.927
0.862
0.879
0.919
0.731
0.788
0.903
0.918
0.776
0.785
0.758
0.836
0.785
0.974
0.887
0.806
0.894
0.839
0.866
0.918
0.909
0.806
0.754
0.894
29.215
23.513
24.780
28.440
13.256
15.050
17.316
17.710
14.405
13.499
19.887
17.191
16.047
22.554
22.144
17.653
15.837
0.817
0.898
0.657
0.732
0.687
0.777
0.630
0.707
0.868
0.944
0.718
0.863
0.727
0.903
Financial risk
Delivery risk
Psychological risk
Social risk
Trust expectation
Table 7
Goodness of t test result.
Category
Measure
Acceptable values
Source
Value
Absolute t indices
2 /d.f
GFI
RMSEA
SRMR
NFI
RFI
IFI
TLI
CFI
PNFI
5 or below
0.90 or above
0.08 or below
0.08 or below
0.90 or above
0.90 or above
0.90 or above
0.90 or above
0.90 or above
0.50 or above
Hair et al. (2010)

Hair et al. (2010)
Browne and Cudeck (1993)
Hu and Bentler (1999)
Bentler and Bonnet (1980)
Hair et al. (2010)
2.137
0.840
0.071
0.082
0.890
0.871
0.931
0.919
0.931
0.761
Incremental t indices
Parsimony t indices
Finally, nomological validity refers to the extent to which the scale

for a construct correlates in theoretically predicted ways with the
scales for other distinct but related constructs (Malhotra, Birks, &
Wills, 2012). As shown in Table 5, all the correlations between two
measures turned out to be positive, and it is consistent with our
postulation of all the hypotheses as positive relationships (please
see Fig. 2). In addition, all these relationships between the measures
in the relationships were found to be signicant, as posited in
the hypotheses. Therefore, the results provide support for the
hypotheses, and thus demonstrate nomological validity. In sum,
the results demonstrate acceptable validity and reliability of the
scales.
5.2. Path analysis

The research model was tested using structural equation
modeling (SEM) which is dened by Pearl (2000) as a statistical
technique for testing and estimating causal relationships, by
combining statistical data with qualitative causal assumptions.
First, the goodness of t of the model was assessed, and the results
are given in Table 7. Bagozzi and Dholakia (2002) suggested that
a satisfactory model t is indicated by nonsignicant chi-squared
tests; RMSEA and SRMR values less than 0.08; and NNFI and CFI
values greater than or equal to 0.90. Among the absolute t indices,
the GFI did not exceed the threshold of 0.90 and the SRMR did
332
Fig. 3. Path coefcients for the tested hypotheses.

Table 8
Summary of hypothesis test result.
Hypothesis
Path
Standardized coefcient
C.R. (t-value)
Signicant at
Result
H1-1
H1-2
H1-3
H1-4
H1-5
H2-1
H2-2
H2-3
H2-4
H2-5
H3
H4
Involvement Financial risk

Involvement Performance risk
Involvement Delivery risk
Involvement Psychological risk
Involvement Social risk
Financial risk Trust expectation
Performance risk Trust expectation
Delivery risk Trust expectation
Psychological risk Trust expectation
Social risk Trust expectation
Involvement Trust expectation
Trust expectation Intention to buy from an e-tailer
0.801
0.806
0.746
0.367
0.537
0.04
0.443
0.035
0.071
0.041
0.349
0.588
12.335
17.782
12.327
6.515
8.784
.409
4.363
.403
1.387
.679
2.246
9.347
0.001
0.001
0.001
0.001
0.001
0.001
0.05
0.001
Supported
Supported
Supported
Supported
Supported
Rejected
Supported
Rejected
Rejected
Rejected
Supported
Supported
not meet the 0.08 or below criterion. Among the incremental t

indices, the NFI and the RFI failed to yield acceptable values. Of the
four indices that did not pass the test, all but GFI nearly approached
the thresholds. In this regard, the goodness of t of the research
model was not quite satisfactory, but supported to some extent.
As shown in Fig. 3 and Table 8, the individual paths of the
research model were examined, and the hypotheses were tested.
First, all the ve components of perceived risk were found to have
signicant positive relationships with situational involvement at
the 0.001 level, providing support for all the ve sub-hypotheses
about the risk components. Second, only one of the ve components of perceived risk was found to have a signicant relationship
with trust expectation. Product performance risk has a signicant
positive relationship with trust expectation at the 0.001 level (path
coefcient = 0.44), providing support for H2-2, but not for the other
four hypotheses. Third, situational involvement has a signicant
positive relationship with trust expectation at the 5% level (path
coefcient = 0.35), providing support for H3. Finally, trust expectation was found to have a signicant positive relationship with
the intention to purchase from an e-tailer at the 0.001 level (path
coefcient = 0.59), providing support for H4. In sum, the results
provide support for 8 of the 12 hypotheses.
5.3. Discussion
Our ndings indicate that situational involvement is positively
related to all the ve types (nancial, product performance,
delivery, psychological, and social) of perceived risk. As discussed
in the Literature Review, consumers with a high level of situational
involvement are likely to temporarily perceive the risks associated
with the online purchase of products. In addition, only product
performance risk turned out to have a positive relationship with
trust expectation, suggesting that if a consumer fears that the
delivered product might be different from the ordered product in
terms of quality or performance, he or she is likely to demand a high
level of trust in the online merchant to mitigate risk perceptions.
Further, situational involvement was positively related to a consumers trust expectation, suggesting that a consumer perceiving
high product importance for the purchase of a given product is
likely to buy it, if and only if the merchant deserves a high level
of trust. Finally, there was a strong relationship between trust
expectation and the intention to buy from an e-tailer, suggesting
that the higher the level of trust the consumer requires of an online
merchant, the more likely he or she is to prefer a digital storefront
to an e-marketplace. We examine these ndings in details below.
(1). Situational Involvement and Perceived Risk
The results indicate that situational involvement had positive
effects on all the ve components of perceived risk, implying that
the more situationally involved a consumer is with a product class,
the more likely he or she is to perceive some risk associated with
nancial, product performance, and delivery issues, among others. This is consistent with the ndings of previous studies. When
contemplating a purchase, the consumer faces the uncertainty and
importance of the risk associated with the purchase (Bauer, 1967).
Venkatraman (1989) found that situational involvement is signicantly positively related to both uncertainty in purchase and
risk importance. Dholakia (2001) provided empirical evidence that
situational involvement has positive effects on functional, psychological, and social risks. Their research model included only these
three risk components, and thus their ndings do not point to any
relationships with nancial or delivery risks.
In addition, online transactions occur through anonymous
encounters; a rare exception to this situation is cottage industries,
where you may get to know the vendor online through blogs and a
history of email orders and correspondence about their supply. And
thus, online consumers are more likely to be concerned about the
entire transaction process, from order placement to delivery, than
their ofine counterparts who buy in a face-to-face setting. For
example, an enthusiast of ICT devices considering an online purchase of a newly released smart watch will develop strong risk perceptions associated with the product being purchased. However,
if the same consumer would buy the same product in a local retail
store, he or she might perceive a lower level of risk and buy with
greater condence with a chance to examine the product. For this
reason, the nding providing support for the above hypothesis
implies that the effect of situational involvement on perceived risk
will be stronger in online stores than in ofine stores.
(2). Perceived Risk and Trust Expectation
The results indicate that only product performance risk had a
positive signicant relationship with the level of trust in a merchant
as required by the consumer. Online consumers are particularly
concerned with product performance risk, because of their inability to physically examine products before purchasing them. When a
consumer is strongly concerned that the product might be of substandard quality, he or she would require a high level of trust in
the online merchant to buy with condence. Product performance
risk is associated with the internal attributes of the product (e.g.
its quality), and the risk can be minimized if the consumer chooses
a trustworthy merchant who is likely to reveal true information
about the quality of individual products.
Why did the remaining types of perceived risk have no signicant effects on trust expectation? Delivery risk, psychological
risk, and social risk are related to the external elements of an
e-commerce transaction (e.g. delivery truck drivers and consumers), and thus are often beyond the control of online merchants.
Because online merchants do not have substantial inuence on such
external elements, consumers cannot effectively address these
risk factors by merely choosing trustworthy merchants. In addition, e-commerce has grown and matured, to the extent that
many e-commerce players are now equipped with robust transactional structures that facilitate consumers trust in merchants. For
example, online marketplaces reect a wide range of IT-enabled
institutional mechanisms, such as feedback mechanisms, thirdparty escrow services, and credit card guarantees, to ensure buyers
trust in the community of online sellers (Hong & Cho, 2011;
Pavlou & Gefen, 2004). Thus, consumers perception of the nancial
risk associated with online transactions has decreased considerably. Furthermore, from the standpoint of consumers, recent
e-commerce merchants in Korea are not quite distinguishable in
terms of likelihood of nancial loss, since they as a whole conform
to the standard e-commerce practices. For these reasons, not only
is it impractical and unnecessary for a consumer to predict how
much nancial risk may be associated with the sellers opportunistic behavior, but also is it infeasible to choose an online merchant
who is truly unlikely to nancially take advantage of the consumers
vulnerability in order to mitigate that risk.
(3). Trust Expectation and the Intention to Buy from an E-Tailer
Our nding indicates a positive relationship between situational involvement and trust expectation, suggesting that consumers
who are situationally involved with a product class are likely to buy
only from trustworthy online merchants. Situational involvement
reects the raised level of interest arising from a specic situation
like a purchase occasion (Dholakia, 2001). Consumers situationally
involved with a product are motivated to avoid a wrong purchase
that may lead to losses, and thus the consumer will look for ways to
mitigate perceived risk, by requiring a high level of trust in potential
online merchants. The sense of protection resulting from the consumers decision to buy from a trustworthy merchant can enable
him or her to feel more secure and relieved from concerns over
unexpected problems.
(4). Situational Involvement and Trust Expectation
Finally, the results indicate that trust expectation was positively
related to the consumers intention to buy from an e-tailer. This
suggests that consumers requiring a high level of trust in the
333
merchant are likely to prefer a digital storefront (or an e-tailer)

to an e-marketplace, because a digital storefront would seem
trustworthier to a consumer than an e-marketplace, as we pointed
out in Literature Review. Although online consumers are generally
concerned about the legitimacy of vendors, and the authenticity
of products or services, buyers using e-marketplaces are more
likely to be exposed to the risks associated with the opportunistic
behavior of sellers, than those using online storefronts (Pavlou &
Gefen, 2004). In addition, in an e-marketplace, buyers routinely
engage in transactions with unfamiliar businesses and individual
sellers (Kim & Ahn, 2007). For this reason, e-marketplaces are typically considered riskier than e-tailers. Thus, an online consumer
requiring a high level of trust should buy from an online storefront,
rather than from an e-marketplace.
6. Conclusion
6.1. Implications
In this study, we focused on examining the effects of situational
involvement, different types of perceived risk, and trust expectation on consumers choice of an online merchant. For this, we
constructed a research model with a set of constructs, including (1)
situational involvement, (2) ve components of perceived risk, (3)
trust expectation, and (4) the intention to buy from an e-tailer. We
conducted an empirical analysis, using survey data.
The ndings of the present study have important theoretical
implications. First, it was revealed that situational involvement
and perceived risk act as important motivators of a consumers
behavioral response, such as the determination of an online merchant to buy from. Whom to buy from is an important part of the
consumers online purchase decision process that is worthwhile
to investigate. Second, some specic components or types of
perceived risk may prove more useful than overall perceived risk
as a research construct, when examining the sources of consumers
risk perceptions, and can provide researchers with valuable
insights into which specic consumer concerns can act as barriers
in the production of desired responses (e.g. purchase decisions).
By identifying the key areas of risk perceptions, we can determine
the effective ways to address the risk that consumers face in
online transactions. Third, the present research has proposed a
new method of measuring purchase intention. Existing research
(e.g. Heijden et al., 2003), in general, tend to measure purchase
intention as the extent to which a consumer is likely to make
purchases at present and in the future. However, this research
measured purchase intention as the preference for an online
merchant on a continuum between a digital storefront and an
e-marketplace. This new approach may enable us to understand a
consumers decision on the nature of a merchant to buy from.
In addition, the results bear important practical implications for
online merchants. First, sellers operating in e-marketplaces should
come up with ways of reducing the amount of product performance
risk as perceived by online buyers. Mitigating this risk in a timely
manner should reduce trust expectation, to the extent that consumers are willing to participate in online transactions with least
concerns. For example, an online vendor selling a scratch remover
for automobiles can reduce the consumers perception of product performance risk, by providing an online video demonstrating
the usage and effectiveness of the product. The second practical
implication is that the online strategy for increasing sales for a digital storefront and for an e-marketplace should be chosen based
on either the amount of perceived risk or the level of situational
involvement. For example, consumers with a high level of product
involvement, or those expecting a high level of trust in a merchant, tend to prefer a digital storefront to an e-marketplace. And
thus, digital storefronts will be better off by launching intensive
334
marketing programs focusing on products involving a high level of

product performance risk or a high level of product involvement
(e.g. luxury handbags, fashion outts, or high-end audio/video
equipment) to increase their sales. Similarly, online marketplaces
are preferred when the consumer does not expect much trust in a
merchant to purchase a product of low involvement. Our nding
shows that low trust expectation is associated with the intention to buy from an e-marketplace. Consumers tend to care less
about the trustworthiness of a merchant when the top priority of
the purchase decision is neither the performance nor the quality but the lower pricing. An online marketplace tends to drive
down prices due to the competition among the sellers within the
marketplace. And thus, e-marketplaces should focus on selling
products involving a low level of product performance risk or a
low level of product involvement (e.g. toothpaste, slippers, or toilet papers). Third, online merchants, both digital storefronts and
e-marketplaces, should make efforts to effectively address product performance risk to attract consumers with high situational
involvement, and gain their trust. For example, a customer who is
considering an online buying of an expensive hi- audio system
and perceives intense product performance risk with regards to
the purchase will feel secured if the online merchant introduces
a customer review corner in the website to enable the sharing of
comments related to product performance.
6.2. Limitations and future research
population of online consumers, and thus, the generalizability of

the ndings to other populations may be limited. Second, trust
expectation, a new construct, was created to examine the effects of
product involvement and perceived risk on the consumers choice
of online merchants. In this regard, future research should replicate
this study to validate this construct. Third, the present research
failed to statistically analyze the mediation effect of perceived
risks in the relationship between situational involvement and trust
expectation. Fourth, the items used to measure situational involvement do not specically focus on the negative consequences of
an online purchase, but on an individuals perceptions of product importance for a purchase situation. Thus, it is possible that
to some extent the scale used has actually measured product
involvement, not situational involvement. Finally, in this research
we investigated the relationship between trust expectation and
the intention to buy from an e-tailer. However, future research
should address the relationship between trust expectation and
the choice of an online merchant, by examining the effects of the
level of consumer trust expected of a merchant, on their actual
choice between a digital storefront and an e-marketplace. Such
efforts should provide a better understanding of the theoretical
relationship between the two constructs, and of any statistical differences in trust expectation between the two types of
merchants.
Appendix A.
This study has some limitations. First, we conducted the survey using college students who may not be representative of the
See Table A1.
Table A1
The questionnaire items.
Construct
Variable
Questionnaire items
SI1
SI2
SI3
SI4
SI5
SI6
SI7
FR1
FR2
FR3
PPR1
PPR2
This product is important to me.

The thought of this product makes me excited.
This product is interesting to me.
This product is needed for me.
This product means a lot to me.
This product is uninvolving to me. [reverse]
This product is fascinating to me.
I would be concerned that the payment method may not be safe.
I would be concerned that the price of this product may be too high.
I would be concerned that I may suffer from monetary loss due to the sellers fraudulent acts.
I would be concerned that the product delivered may not perform to my expectations.
I would be concerned that the product delivered may not match the descriptions, including the pictures,
given on the website.
I would be concerned that I may not get my moneys worth from the product when buying it.
I would be concerned that the product may be delivered to a wrong address.
I would be concerned that I may abase myself.
I would be concerned that the product may not t my image.
The thought of buying the product makes me anxious.
My friends and co-workers opinions about my buying the product would cause me to feel concern.
When buying the product, I would be concerned about what people whose opinion was of value to me,
would think of me, if I made a bad choice.
My purchasing the product would cause me concern about what my friends would think of me, if I made a
bad choice.
The online merchant should have necessary capabilities and resources to carry out its activities.
The online merchant should have sufcient experience to handle the work properly.
The online merchant should keep a customers best interests in mind.
The online merchant should successfully support the desires and needs of its users.
The online merchant should provide honest information.
The online merchant should keep its promises and commitments.
I would rather order from an e-tailer, rather than an e-marketplace, when purchasing the product online.
Financial risk
Delivery risk
Psychological risk
Social risk
DR1
DR2
PR1
PR2
PR3
SR1
SR2
SR3
Trust expectation
TE1
TE2
TE3
TE4
TE5
TE6
IBE
References
Applegate, L. M. (2001). Emerging e-business models: Lessons from the eld HBS #
9-801-172. Boston, MA: Harvard Business School.
Bagozzi, R., & Dholakia, U. (2002). Intentional social action in virtual communities.
Journal of Interactive Marketing, 16(2), 221.
Bakos, J. Y. (1997). Reduced buyer search costs: Implications for electronic marketplaces. Management Science, 43(12), 16761692.
Bauer, R. A. (1960). Consumer behavior as risk-taking. In R. Hancock (Ed.), Dynamic
marketing for a changing world (Proceedings of the 43rd conference) (pp. 389398).
American Marketing Association.
Bauer, R. A. (1967). Consumer Behavior as Risk Taking. In D. Cox (Ed.), Risk Taking and Information Handling in Consumer Behavior. Cambridge, Mass: Harvard
University Press.
Bentler, P. M., & Bonnet, D. C. (1980). Signicance tests and goodness of
t in the analysis of covariance structures. Psychological Bulletin, 88(3),
588606.
Bian, X., & Moutinho, L. (2008). The role of product involvement, knowledge, and
perceptions in explaining consumer purchase behaviour of counterfeits: Direct
and indirect effects. Research Memorandum, 77.
Bloch, P. H. (1981). An exploration into the scaling of consumers involvement with
a product class. In H. Kent, & Monroe (Eds.), Advances in consumer research, vol.
8 (pp. 6165). Ann Arbor, MI: Association for Consumer Research.
Bloch, P. H. (1986). The product enthusiast: Implications for marketing strategy.
Journal of Consumer Marketing, 3, 5162.
Bloch, P. H., & Richins, M. L. (1983). A theoretical model for the study of product
importance perceptions. Journal of Marketing, 47, 6981.
Bloch, P. H., Sherrell, D. L., & Ridgway, N. M. (1986). Consumer search: An extended
framework. Journal of Consumer Research, 13, 119126.
Browne, M. W., & Cudeck, R. (1993). Alternative ways of assessing model t. In K.
A. Bollen, & J. S. Long (Eds.), Testing structural equation models (pp. 136162).
Beverly Hills, CA: Sage.
Browne, B. A., & Kaldenberg, D. O. (1997). Conceptualising self-monitoring: Links
to materialism and product involvement. Journal of Consumer Marketing, 14(1),
3144.
Cases, A. S. (2002). Perceived risk and risk-reduction strategies in Internet shopping.
The International Review of Retail, Distribution and Consumer Research, 12(4),
375394.
Chiu, C. M., Wang, E., Fang, Y. H., & Huang, H. Y. (2012). Understanding
customers repeat purchase intentions in B2C e-commerce: The roles of utilitarian value, hedonic value and perceived risk. Information Systems Journal,
http://dx.doi.org/10.1111/j.1365-2575.2012.00407.x
Cho, J. (2004). Likelihood to abort an online transaction: Inuences from cognitive evaluations, attitudes, and behavioral variables. Information & Management,
41(7), 827838.
Comegys, C., Hannula, M., & Vaisanen, J. (2009). Effects of consumer trust and risk
on online purchase decision-making: A comparison of Finnish and United States
students. International Journal of Management, 26(2), 295308.
Cox, D. F. (1967). Risk handling in consumer behavior: An intensive study of two
cases. In D. F. Cox (Ed.), Risk taking and information handling in consumer behavior.
Boston: Harvard University Press.
De Wulf, K., Odekerken-Schrder, G., & Iacobucci, D. (2001). Investments in consumer relationships: A cross-country and cross-industry exploration. Journal of
Marketing, 65, 3350. October.
Deutsch, M. (1973). The resolution of conict. New Haven and London: Yale University
Press.
Dholakia, U. M. (2001). A motivational process model of product involvement
and consumer risk perception. European Journal of Marketing, 35(11/12),
13401362.
Dowling, G. R., & Staelin, R. (1994). A Model of Perceived Risk and Intended RiskHandling Activity. Journal of Consumer Research, 21(1), 119134.
Engel, J. F., Blackwell, R. D., & Kollat, D. T. (1978). Consumer Behavior. Hinsdale, Ill:
Dryden Press.
Garbarino, E., & Strahilevitz, M. (2004). Gender differences in the perceived risk
of buying online and the effects of receiving a site recommendation. Journal of
Business Research, 57, 768775.
Grabner-Krauter, S., & Kaluscha, E. A. (2003). Empirical research in on-line trust: A
review and critical assessment. International Journal of HumanComputer Studies,
58(6), 783812.
Hair, J. F., Black, W. C., Babin, B. J., & Anderson, R. E. (2010). Multivariate data analysis
(7th ed). Upper Saddle River, NJ: Pearson Prentice Hall.
Hawkins, D., & Mothersbaugh, D. (2012). Consumer Behavior: Building Marketing
Strategy (12th ed.). New York, NY: McGraw-Hill/Irwin.
Heijden, H. V., Verhagen, T., & Creemers, M. (2003). Understanding online purchase
intentions: contributions from technology and trust perspectives. European Journal of Information Systems, 12(1), 4148.
Hoffman, D. L., Novak, T. P., & Peralta, M. (1999). Building consumer trust online.
Communications of the ACM, 42(4), 8085.
Hong, I., & Cho, H. (2011). The impact of consumer trust on attitudinal loyalty and purchase intentions in B2C e-marketplaces: Intermediary trust
vs. seller trust. International Journal of Information Management, 31(5),
469479.
Hong, I., & Cha, H. (2013). The mediating role of consumer trust in an online merchant
in predicting purchase intention. International Journal of Information Management, 33(6), 927939.
335
Houston, M. J., & Rothschild, M. L. (1978). Conceptual and methodological perspectives in involvement. In S. Jain (Ed.), Research frontiers in marketing: Dialogues
and directions (pp. 184187). Chicago, IL: American Marketing Association.
Hu, L. T., & Bentler, P. M. (1999). Cutoff criteria for t indexes in covariance structure analysis: Conventional criteria versus new alternatives. Structural Equation
Modeling, 6(1), 155.
Jacoby, J., & Kaplan, L. B. (1972). The components of perceived risk. In M. Venkatesan (Ed.), Proceedings of the 3rd annual conference. Association for Consumer
Research.
Jarvenpaa, S. L., Tranctinsky, N., & Vitale, M. (2000). Consumer trust in an Internet
store. Information Technology and Management, 1(1), 4571.
Johnson-George, C., & Swap, W. C. (1982). Measurement of special interpersonal
trust: Construction and validation of a scale to access trust in a specic other.
Journal of Personality and Social Psychology, 43(6), 13061317.
Kim, M. S., & Ahn, J. H. (2006). Comparison of trust sources of an online market-maker
in the E-marketplace: Buyers and sellers perspectives. Journal of Computer Information Systems, 47(1), 8494.
Kim, M. S., & Ahn, J. H. (2007). Management of trust in the E-marketplace: The role of
the buyers experience in building trust. Journal of Information Technology, 22(2),
119132.
Kurtz, D. L., & Clow, K. E. (1997). Services marketing. New York: John Wiley & Sons.
Laaksonnen, P. (1994). Consumer involvement: Concepts and research. London: Routledge.
Laurent, G., & Kapferer, J. (1985). Measuring consumer involvement proles. Journal
of Marketing Research, 22(1), 4153.
Liang, T. P., & Huang, J. S. (1998). An empirical study on consumer acceptance of products in electronic markets: A transaction cost model. Decision Support Systems,
24(1), 2943.
Malhotra, N. K., Birks, D. F., & Wills, P. A. (2012). Marketing research: An applied
approach (4th ed.). Pearson Education.
Mayer, R. C., Davis, J. H., & Schoorman, F. D. (1995). An integrative model of organizational trust. The Academy of Management Review, 20(3), 709734.
Mishra, D. P., Heide, J. B., & Cort, S. G. (1998). Information Asymmetry and Levels of
Agency Relationships. Journal of Marketing Research, 35(3), 277295.
Nunnally, J. C. (1978). Psychometric theory. New York, NY: McGraw-Hill.
Olivero, N., & Lunt, P. (2004). Privacy versus willingness to disclose in e-commerce
exchanges: The effect of risk awareness on the relative role of trust and control.
Journal of Economic Psychology, 25, 243262.
Olson, J. S., & Olson, G. M. (2000). i2i trust in e-commerce. Communications of the
ACM, 43(12), 4144.
Pavlou, P. A., & Gefen, D. (2004). Building effective online marketplaces with
institution-based trust. Information Systems Research, 15(1), 3759.
Pavlou, P. A. (2003). Consumer acceptance of electronic commerce: Integrating trust
and risk with the technology acceptance model. International Journal of Electronic
Commerce, 7(3), 69103.
Pavlou, P. A., Liang, H., & Xue, Y. (2007). Understanding and mitigating uncertainty
in online exchange relationships: A principal-agent perspective. MIS Quarterly,
31(1), 105136.
Pearl, J. (2000). Causality: Models, Reasoning, and Inference (2nd ed.). New York, N.Y:
Cambridge University Press.
Peter, J. P., & Ryan, M. J. (1976). An investigation of perceived risk at the brand level.
Journal of Marketing Research, 13(2), 184188.
Radder, L., & Huang, W. (2008). High-involvement and low-involvement products:
A comparison of brand awareness among students at a South African university.
Journal of Fashion Marketing and Management: An International Journal, 12(2),
232243.
Rappa, M. (2002). Business models on the web. http://digitalenterprise.org/
models/models.html
Richins, M. L., & Bloch, P. H. (1986). After the new wears off: The temporal context
of product involvement. Journal of Consumer Research, 13, 280285.
Richins, M. L., Bloch, P. H., & McQuarrie, E. F. (1992). How enduring and situation
involvement combine to create involvement responses. Journal of Consumer
Psychology, 1(2), 143153.
Ring, P. S., & Van de Ven, A. H. (1994). Developing processes of cooperative interorganizational relationships. Academy of Management Review, 19, 90118.
Rothschild, M. L. (1979). Advertising strategies for high and low involvement situations. In J. Maloney, & B. Silverman (Eds.), Attitude research plays for high stakes
(pp. 7493). Chicago, IL: The American Marketing Association.
Schiffman, L. G., & Kanuk, L. L. (1994). Consumer behavior. Englewood Cliffs, NJ:
Prentice-Hall.
Sherif, M., & Hovland, C. I. (1961). Social judgment: Assimilation and contrast effects
in communication and attitude change. New Haven: Yale University Press.
Sherif, C. W., Sherif, M. S., & Nebergall, R. E. (1965). Attitude and attitude change.
Philadelphia: W.B. Saunders Company.
Solomon, M. R. (1986). Deep-seated materialism: The case of Levis 501 jeans. In R.
Lutz (Ed.), Advances in Consumer Research, vol. 13 (pp. 619622). Las Vegas, NV:
Association for Consumer Research.
Stone, R. N., & Gronhaug, K. (1993). Perceived risk: Further considerations for the
marketing discipline. European Journal of Marketing, 27(3), 372394.
Tan, Y. H., & Thoen, W. (2000). Towards a generic model of trust for electronic
commerce. International Journal of Electronic Commerce, 5(2), 6174.
Taylor, J. W. (1974). The role of risk in consumer behaviour. Journal of Marketing, 38,
5460.
Timmers, P. (1998). Business models for electronic markets. Electronic Market, 8(2),
28.
336
Venkatraman, M. (1989). Involvement and risk. Psychology and Marketing, 6(3),

229247.
Verhagen, T., Meents, S., & Tan, Y. (2006). Perceived risk and trust associated with
purchasing at electronic marketplaces. European Journal of Information Systems,
15, 542555.
Williamson, O. E. (1993). Opportunism and its critics. Managerial and Decision Economics, 14, 97107.
Zaichkowsky, J. L. (1985). Measuring the Involvement Construct. Journal of Consumer
Research, 12, 341352.
Zaichkowsky, J. L. (1994). The personal involvement inventory: Reduction, revision
and application to advertising. Journal of Advertising, 23, 5970.
Ilyoo B. Hong is presently professor of management information systems at

Chung-Ang University, Seoul, Korea. He earned his PhD degree in MIS from the
University of Arizona, his MS in Business from the University of Illinois at UrbanaChampaign, and his BS in Management from Indiana University. He was a visiting
scholar at the UCLA Anderson School of Management. Ilyoo Hong has published in
such journals as Decision Sciences, Information & Management, and International
Journal of Information Management, among others. He also presented academic
papers at numerous international conferences, including HICSS. His research interests include building online consumer trust, measuring the quality and impact of
web-based information systems, and information disclosure in social networking
sites.

International Journal of Information Management: Ilyoo B. Hong

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

International Journal of Information Management: Ilyoo B. Hong

Uploaded by

Copyright:

Available Formats

International Journal of Information Management 35 (2015) 322336

Contents lists available at ScienceDirect

International Journal of Information Management

Understanding the consumers online merchant selection process: The

Tel.: +82 2 820 5549; fax: +82 2 813 8910.

I.B. Hong / International Journal of Information Management 35 (2015) 322336

inuenced by numerous factors such as value, brands, trust, among

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Jacoby and Kaplan (1972)

Financial, product performance, physical, social, and psychological

Therefore, a consumer develops risk perceptions since a purchase

I.B. Hong / International Journal of Information Management 35 (2015) 322336

disciplines, due to the differences in viewpoints about the concept

2.5. E-tailers vs. e-marketplaces

E-tailers are independent digital storefronts that are essentially

Third party marketplace

I.B. Hong / International Journal of Information Management 35 (2015) 322336

orders, processing returns and exchanges, and after-sales customer

studies, a trust construct is used that measures perceptions of the

3.1. The trust expectation concept

Decide on how much

Choose a product that

Ensure that the

Fig. 1. The online merchant selection process.

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Fig. 2. The research model.

to safeguard his or her transaction by buying from a trustworthy

component of perceived risk. We will show how situational

Situational involvement is positively related to nancial

Second, product performance risk is the possibility of the

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Situational involvement is positively related to delivery

Fourth, psychological risk is dened as the possibility that

Situational involvement is positively related to social risk.

3.3.2. Perceived risk and trust expectation

I.B. Hong / International Journal of Information Management 35 (2015) 322336

product for the individual consumer. The greater the perception

H4. The trust expectation of a merchant is positively related to

I.B. Hong / International Journal of Information Management 35 (2015) 322336

regard the items for involvement as all referring to the scale on a

an online merchant. As we mentioned in the literature review, we

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Product performance risk

Intention to buy from e-tailer

Hair et al. (2010)

Finally, nomological validity refers to the extent to which the scale

5.2. Path analysis

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Fig. 3. Path coefcients for the tested hypotheses.

Involvement Financial risk

not meet the 0.08 or below criterion. Among the incremental t

I.B. Hong / International Journal of Information Management 35 (2015) 322336

merchant are likely to prefer a digital storefront (or an e-tailer)

I.B. Hong / International Journal of Information Management 35 (2015) 322336

marketing programs focusing on products involving a high level of

population of online consumers, and thus, the generalizability of

See Table A1.

This product is important to me.

Product performance risk

Intention to buy from e-tailer

I.B. Hong / International Journal of Information Management 35 (2015) 322336

I.B. Hong / International Journal of Information Management 35 (2015) 322336

Venkatraman, M. (1989). Involvement and risk. Psychology and Marketing, 6(3),