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

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  • 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
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    1. Marta Ballatore & Lise Arena & Agnès Festré, 2020. "The Use of Experimental Methods by IS Scholars: An Illustrated Typology," Post-Print halshs-02866756, HAL.
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    4. 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.

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