IDEAS home Printed from https://ideas.repec.org/a/inm/orisre/v30y2019i2p507-522.html
   My bibliography  Save this article

Effects of Sponsorship Disclosure on Perceived Integrity of Biased Recommendation Agents: Psychological Contract Violation and Knowledge-Based Trust Perspectives

Author

Listed:
  • Weiquan Wang

    (Department of Information Systems, College of Business, City University of Hong Kong, Kowloon, Hong Kong SAR, China;)

  • May Wang

    (United International College, Beijing Normal University–Hong Kong Baptist University, Zhuhai, 519085 Guangdong, China)

Abstract

The perceived integrity of online product recommendation agents (RAs) becomes a critical trust concern when RAs apply sponsorship practices and recommend products biased toward sponsored products. Sponsorship disclosure is enforced by the U.S. Federal Trade Commission, but many technologies fail to comply, probably because of their concerns about users’ trust in the biased technologies. By applying the theoretical perspectives of psychological contract violation and knowledge-based trust, we intend to reveal when sponsorship disclosure is most effective in enhancing users’ perceived RA integrity. A laboratory experiment revealed two major findings. First, sponsorship disclosure leads to users’ perceived RA integrity via reduced perceived psychological contract violations of a biased RA, but only for users with high prior knowledge about the prevalence of sponsorships used by RAs in general. For users with limited prior knowledge, the disclosure fails to reduce these perceived violations. Second, regardless of the level of such prior knowledge of users, sponsorship disclosure enhances users’ perceived transparency of a biased RA, which, in turn, leads to perceived RA integrity. Theoretical and practical implications are discussed.

Suggested Citation

  • Weiquan Wang & May Wang, 2019. "Effects of Sponsorship Disclosure on Perceived Integrity of Biased Recommendation Agents: Psychological Contract Violation and Knowledge-Based Trust Perspectives," Information Systems Research, INFORMS, vol. 30(2), pages 507-522, June.
  • Handle: RePEc:inm:orisre:v:30:y:2019:i:2:p:507-522
    DOI: 10.1287/isre.2018.0811
    as

    Download full text from publisher

    File URL: https://doi.org/10.1287/isre.2018.0811
    Download Restriction: no

    File URL: https://libkey.io/10.1287/isre.2018.0811?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    References listed on IDEAS

    as
    1. Bo Xiao & Izak Benbasat, 2014. "Research on the Use, Characteristics, and Impact of e-Commerce Product Recommendation Agents: A Review and Update for 2007–2012," Progress in IS, in: Francisco J. Martínez-López (ed.), Handbook of Strategic e-Business Management, edition 127, pages 403-431, Springer.
    2. Hélène Deval & Susan P. Mantel & Frank R. Kardes & Steven S. Posavac, 2013. "How Naive Theories Drive Opposing Inferences from the Same Information," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 39(6), pages 1185-1201.
    3. Oecd, 2013. "Electronic and Mobile Commerce," OECD Digital Economy Papers 228, OECD Publishing.
    4. Animesh Animesh & Vandana Ramachandran & Siva Viswanathan, 2010. "Research Note ---Quality Uncertainty and the Performance of Online Sponsored Search Markets: An Empirical Investigation," Information Systems Research, INFORMS, vol. 21(1), pages 190-201, March.
    5. Anthony Vance & Christophe M. Elie-Dit-Cosaque & Detmar W. Straub, 2008. "Examining Trust in Information Technology Artifacts: The Effects of System Quality and Culture," Post-Print halshs-00641137, HAL.
    6. repec:dau:papers:123456789/2723 is not listed on IDEAS
    7. Krämer, Jan & Wiewiorra, Lukas & Weinhardt, Christof, 2013. "Net neutrality: A progress report," Telecommunications Policy, Elsevier, vol. 37(9), pages 794-813.
    8. Vicki McKinney & Kanghyun Yoon & Fatemeh “Mariam” Zahedi, 2002. "The Measurement of Web-Customer Satisfaction: An Expectation and Disconfirmation Approach," Information Systems Research, INFORMS, vol. 13(3), pages 296-315, September.
    9. D. Harrison McKnight & Vivek Choudhury & Charles Kacmar, 2002. "Developing and Validating Trust Measures for e-Commerce: An Integrative Typology," Information Systems Research, INFORMS, vol. 13(3), pages 334-359, September.
    10. Gediminas Adomavicius & Jesse C. Bockstedt & Shawn P. Curley & Jingjing Zhangc, 2018. "Effects of Online Recommendations on Consumers’ Willingness to Pay," Information Systems Research, INFORMS, vol. 29(1), pages 84-102, March.
    11. Nelson Granados & Alok Gupta & Robert J. Kauffman, 2010. "Research Commentary---Information Transparency in Business-to-Consumer Markets: Concepts, Framework, and Research Agenda," Information Systems Research, INFORMS, vol. 21(2), pages 207-226, June.
    12. Paul A. Pavlou & David Gefen, 2005. "Psychological Contract Violation in Online Marketplaces: Antecedents, Consequences, and Moderating Role," Information Systems Research, INFORMS, vol. 16(4), pages 372-399, December.
    13. Weiquan Wang & Jingjun (David) Xu & May Wang, 2018. "Effects of Recommendation Neutrality and Sponsorship Disclosure on Trust vs. Distrust in Online Recommendation Agents: Moderating Role of Explanations for Organic Recommendations," Management Science, INFORMS, vol. 64(11), pages 5198-5219, November.
    14. Pehlivan, Ekin & Berthon, Pierre & Hughes, Mine Üçok & Berthon, Jean-Paul, 2015. "Keeping up with The Joneses: Stealth, secrets, and duplicity in marketing relationships," Business Horizons, Elsevier, vol. 58(6), pages 591-598.
    15. Bo Xiao & Izak Benbasat, 2015. "Designing Warning Messages for Detecting Biased Online Product Recommendations: An Empirical Investigation," Information Systems Research, INFORMS, vol. 26(4), pages 793-811, December.
    16. Kim, Peter H. & Dirks, Kurt T. & Cooper, Cecily D. & Ferrin, Donald L., 2006. "When more blame is better than less: The implications of internal vs. external attributions for the repair of trust after a competence- vs. integrity-based trust violation," Organizational Behavior and Human Decision Processes, Elsevier, vol. 99(1), pages 49-65, January.
    17. Zsolt Katona & Miklos Sarvary, 2010. "The Race for Sponsored Links: Bidding Patterns for Search Advertising," Marketing Science, INFORMS, vol. 29(2), pages 199-215, 03-04.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Marta Ballatore & Lise Arena & Agnès Festré, 2020. "The Use of Experimental Methods by IS Scholars: An Illustrated Typology," Post-Print halshs-02866756, HAL.
    2. Cao, Zike & Belo, Rodrigo, 2023. "Effects of Explicit Sponsorship Disclosure on User Engagement in Social Media Influencer Marketing," SocArXiv b8tsg, Center for Open Science.
    3. Cao, Zike & Belo, Rodrigo, 2023. "Effects of Explicit Sponsorship Disclosure on User Engagement in Social Media Influencer Marketing," SocArXiv b8tsg_v1, Center for Open Science.
    4. Ziliang Deng & Peter W Liesch & Zeyu Wang, 2021. "Deceptive signaling on globalized digital platforms: Institutional hypnosis and firm internationalization," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 52(6), pages 1096-1120, August.
    5. Valentin Kammerlohr & David Paradice, 2023. "Interpersonal and Technology-Based Trust Research: Gaps and Opportunities for Research and Practice," Foundations and Trends(R) in Information Systems, now publishers, vol. 6(4), pages 244-321, February.
    6. Adrian Waltenrath, 2024. "Consumers’ ambiguous perceptions of advertising disclosures in influencer marketing: Disentangling the effects on current and future social media engagement," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-24, December.
    7. Zofia Saternus & Cristina Mihale-Wilson & Oliver Hinz, 2024. "Influencer marketing on Instagram—The optimal disclosure strategy from influencers’ and marketers’ perspectives," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-27, December.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Weiquan Wang & Jingjun (David) Xu & May Wang, 2018. "Effects of Recommendation Neutrality and Sponsorship Disclosure on Trust vs. Distrust in Online Recommendation Agents: Moderating Role of Explanations for Organic Recommendations," Management Science, INFORMS, vol. 64(11), pages 5198-5219, November.
    2. Kevin Bauer & Andrej Gill, 2024. "Mirror, Mirror on the Wall: Algorithmic Assessments, Transparency, and Self-Fulfilling Prophecies," Information Systems Research, INFORMS, vol. 35(1), pages 226-248, March.
    3. Sullivan, Yulia W. & Kim, Dan J., 2018. "Assessing the effects of consumers’ product evaluations and trust on repurchase intention in e-commerce environments," International Journal of Information Management, Elsevier, vol. 39(C), pages 199-219.
    4. Wen-Lung Shiau & Yogesh K. Dwivedi, 2013. "Citation and co-citation analysis to identify core and emerging knowledge in electronic commerce research," Scientometrics, Springer;Akadémiai Kiadó, vol. 94(3), pages 1317-1337, March.
    5. Sara Moussawi & Marios Koufaris & Raquel Benbunan-Fich, 2021. "How perceptions of intelligence and anthropomorphism affect adoption of personal intelligent agents," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(2), pages 343-364, June.
    6. Jung Lee & Jae-Nam Lee & Bernard C. Y. Tan, 2015. "Antecedents of cognitive trust and affective distrust and their mediating roles in building customer loyalty," Information Systems Frontiers, Springer, vol. 17(1), pages 159-175, February.
    7. Michael Arnold & Éric Darmon & Thierry Pénard, 2012. "To Sponsor or Not to Sponsor: Sponsored Search Auctions with Organic Links," Economics Working Paper Archive (University of Rennes & University of Caen) 201207, Center for Research in Economics and Management (CREM), University of Rennes, University of Caen and CNRS.
    8. Lin Li & Kyung Young Lee & Emmanuel Emokpae & Sung-Byung Yang, 2021. "What makes you continuously use chatbot services? Evidence from chinese online travel agencies," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(3), pages 575-599, September.
    9. Malhotra, Neeru & Sahadev, Sunil & Purani, Keyoor, 2017. "Psychological contract violation and customer intention to reuse online retailers: Exploring mediating and moderating mechanisms," Journal of Business Research, Elsevier, vol. 75(C), pages 17-28.
    10. Dan J. Kim & Donald L. Ferrin & H. Raghav Rao, 2009. "Trust and Satisfaction, Two Stepping Stones for Successful E-Commerce Relationships: A Longitudinal Exploration," Information Systems Research, INFORMS, vol. 20(2), pages 237-257, June.
    11. Kinshuk Jerath & Liye Ma & Young-Hoon Park & Kannan Srinivasan, 2011. "A "Position Paradox" in Sponsored Search Auctions," Marketing Science, INFORMS, vol. 30(4), pages 612-627, July.
    12. Przemys?aw Jeziorski & Sridhar Moorthy, 2018. "Advertiser Prominence Effects in Search Advertising," Management Science, INFORMS, vol. 64(3), pages 1365-1383, March.
    13. Paul A. Pavlou & Angelika Dimoka, 2006. "The Nature and Role of Feedback Text Comments in Online Marketplaces: Implications for Trust Building, Price Premiums, and Seller Differentiation," Information Systems Research, INFORMS, vol. 17(4), pages 392-414, December.
    14. Scott Thiebes & Sebastian Lins & Ali Sunyaev, 2021. "Trustworthy artificial intelligence," Electronic Markets, Springer;IIM University of St. Gallen, vol. 31(2), pages 447-464, June.
    15. Viswanath Venkatesh & James Y. L. Thong & Frank K. Y. Chan & Paul J. H. Hu, 2016. "Managing Citizens’ Uncertainty in E-Government Services: The Mediating and Moderating Roles of Transparency and Trust," Information Systems Research, INFORMS, vol. 27(1), pages 87-111, March.
    16. Andreas I. Nicolaou & D. Harrison McKnight, 2006. "Perceived Information Quality in Data Exchanges: Effects on Risk, Trust, and Intention to Use," Information Systems Research, INFORMS, vol. 17(4), pages 332-351, December.
    17. Weck, Marina & Afanassieva, Marianne, 2023. "Toward the adoption of digital assistive technology: Factors affecting older people's initial trust formation," Telecommunications Policy, Elsevier, vol. 47(2).
    18. Zhen Shao & Lin Zhang & Tian Meng & Jing Zhang, 2024. "The paradox of technology quality and ethical concerns in building trust and behavioral intention in the AI-enabled face recognition payment," Electronic Markets, Springer;IIM University of St. Gallen, vol. 34(1), pages 1-20, December.
    19. Ni Huang & Probal Mojumder & Tianshu Sun & Jinchi Lv & Joseph M. Golden, 2021. "Not Registered? Please Sign Up First: A Randomized Field Experiment on the Ex Ante Registration Request," Information Systems Research, INFORMS, vol. 32(3), pages 914-931, September.
    20. Wallbach, Sören, 2020. "Assimilation and Diffusion of Multi-Sided Platforms in Dynamic B2B Networks: Inhibiting Factors and Their Consequences," Publications of Darmstadt Technical University, Institute for Business Studies (BWL) 123277, Darmstadt Technical University, Department of Business Administration, Economics and Law, Institute for Business Studies (BWL).

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:inm:orisre:v:30:y:2019:i:2:p:507-522. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Chris Asher (email available below). General contact details of provider: https://edirc.repec.org/data/inforea.html .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.