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Can Web Seals Work Wonders for Small E-Vendors in the Online Trading Environment? A Theoretical Approach

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  • Xiaorui Hu

    (Saint Louis University, USA)

  • Yuhong Wu

    (William Paterson University, USA)

Abstract

Trust is a major issue in e-markets. It is an even more prominent issue when online shoppers trade with small, less-established e-vendors. Empirical studies on Web seals show that small e-vendors could promote consumers’ trust and increase Web sales by displaying Web seals of approval. This article takes a theoretical approach to examine online trading when seals are used in e-markets. We establish an online shopper’s decision-making model to reveal the online shopper’s decision-making criteria. Criteria include when to trade with a well-established e-vendor and when to trade with a small, less-established e-vendor, with or without a Web seal. Based on our analysis of the research results, we reveal the price effect, the seal effect, the reputation effect, and their impact on a shopper’s decision-making process. Meanwhile, a social welfare analysis is conducted to further demonstrate the positive impact of Web seals on small, less-established e-vendors.

Suggested Citation

  • Xiaorui Hu & Yuhong Wu, 2008. "Can Web Seals Work Wonders for Small E-Vendors in the Online Trading Environment? A Theoretical Approach," International Journal of E-Business Research (IJEBR), IGI Global, vol. 4(3), pages 20-39, July.
    • Handle: RePEc:igg:jebr00:v:4:y:2008:i:3:p:20-39
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    Cited by:

    1. Benedicktus, Ray L. & Brady, Michael K. & Darke, Peter R. & Voorhees, Clay M., 2010. "Conveying Trustworthiness to Online Consumers: Reactions to Consensus, Physical Store Presence, Brand Familiarity, and Generalized Suspicion," Journal of Retailing, Elsevier, vol. 86(4), pages 322-335.

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