On-Line Shopping (Seriously!)

Social Trust and Civil Society

Diana C. Mutz

• Professor of Political Science and Communication at University of Pennsylvania

• http://www.polisci.upenn.edu/index.php?option=com_content&task=view&id=29&Itemid=73

• Interests: Public opinion, political psychology and mass political behavior, with a particular emphasis on political communication

• Book: Hearing the Other Side

“Effects of Internet Commerce on Social Trust” by Dianna C. Mutz:

A Summary•Main Question: Does online purchasing increase levels of generalized social trust for those who participate in successful online transactions?

•Positive e-commerce experiences promote generalized social trust. •Social trust is a key factor in promoting healthy societies. •This study combines elements of sociology, political science, and psychology to determine levels of social trust in online purchasing.

•Social Trust in Economic Exchange:•Mutz sees social trust as having economic benefits. •Trust reduces transaction costs, which are eliminated when the parties involved in a transaction no longer need to pay a third party for enforcement of an agreement. •People with high levels of trust should be more likely to engage in economic transactions with one another because they assume that the person they are working with is trustworthy. •Individuals who use the internet and buy things online tend to be higher in social trust than those who do not.•Low expectations, combined with positive outcomes, should combine to make e-commerce a positive force for social trust if people can be convinced to take part. •When negative experiences occur, they should have precisely the opposite effect and lower generalized social trust. •Idea of risk-taking in online purchasing.

•End of Geography: Mutz makes references to the fact that “social trust makes it possible to coordinate actions over large domains of time and space, thus permitting larger, more complex economies (441).”

What is Social Trust? Definition: The trust between two people who don’t know each other at the first time. The core of social trust is to trust strangers.

Or, more formally, “the probability that two randomly chosen people will trust each other in a one-time interaction” (440).

What does Social Trust have anything to do with E-commerce?

“Trust industry” http://www.youtube.com/watch?v=43ObnRAKN7Q

First Study and Results • 3 experimental conditions applied: Buying online is encouraged/Buying online

is discouraged/Control condition• Results of Study: The results show that those who have

already bought online are significantly higher in trust then those who have never bought online.

• Advantage: Large sample size/ national survey/representative enough

• Limitation: Limits the strength of experimental treatment and thus applied to generalizability of these findings to actual online purchasing experiences. Constrained the level of realism in this study because subjects were not able to actually purchase online.

Second Study on Social Trust•Mutz’s goal was to manipulate individuals’ first experience with an e-commerce transaction in the most natural fashion. •A relatively small number of respondents was used. •The experiment was begun in a laboratory setting and then completed weeks later when the same participants were contacted by phone at their homes. •Only individuals who had never purchased anything online before were included in this study. •After each person completed the questions about social trust, they were told they would receive a free CD as a token of appreciation.•Participants were then randomly assigned to one of three conditions: a positive online shopping experience, a negative online shopping experience, or a control condition.•The control condition gave subjects a printed list of the more than 70 available CDs and asked which one they would like to get as their free gift. •They were then immediately given the CD they had selected. •n the positive and negative online shopping conditions, participants were instead given a coupon good for one CD from the online CD store called MusicWorldCDs.com. •MusicWorldCDs.com was a fake website created solely for this experiment. The website appeared and functioned as a normal website where customers could browse genres, selections, etc. After they selected a CD, they entered their coupon code and no payment was required, just a delivery address so their free CD could be shipped. •The positive experience participants received their CD within two days of ordering it along with a “Thank you for your business” note with the company name and logo. •The negative experience participants received their CD in a broken and blank condition, along with a note that said to contact the manufacturer about the condition of the CD, not the company. However, the note left out any information as to how to contact the manufacturer. •Four weeks later, participants of both the negative and positive conditions were telephoned by people who identified themselves as calling from Ohio State University (a different location from the lab study). Participants were then asked the same battery of social trust questions that they were asked before shopping online at MusicWorldCDs.com. •After being asked these questions, the callers confirmed whether or not the participants had received their free CDs.

Results of Second Study

•Respondents in the Control condition changed very little in their levels of social trust. •Respondents in the Positive Internet Purchase condition became more trusting. •Those in the Negative Internet Purchase condition in the direction of less generalized social trust.•Thus, those who encountered a negative experience online became less trusting and those that had a positive experience online became more trusting.

Mutz’s Conclusion •As a result of conducting these two studies, Mutz determined that when a person performs an action that is perceived as potentially risky and it works out well, trust will increase. •If the action results in disappointment (i.e. expectations were not met), trust will be lowered.

Social Capital •Social capital refers to connections among individuals – social networks and the values and sense of trust that arises from these networks. (http://www.infed.org/biblio/social_capital.htm)

•"Broadly, social capital concerns the norms and values people hold that result in, and are the result of, collective and socially negotiated ties and relationships. It is integrally related to other forms of capital, such as human (skills and qualifications), economic (wealth), cultural (modes of thinking) and symbolic (prestige and personal qualities). For example, economic capital augments social capital, and cultural capital can be readily translated into human and social capitals (Edwards, 2002)."

•A society of many virtuous but isolated individuals is not necessarily rich in social capital. There must be interactions occurring between individuals. •In other words, social capital relies on interactions between people in order to build communities and to commit themselves to each other.•This principle is discussed by Dr. Robert Putnam, a professor of public policy at Harvard University, in the book Bowling Alone, in which he describes the decline of social capital in America. According to Putnam, this decline is a result of the lack of in-person interaction in which Americans once engaged. (http://www.hks.harvard.edu/about/faculty-staff-directory/robert-putnam; http://www.bowlingalone.com/)•Americans are no longer forming and joining communities, networks, and organizations. Putnam uses bowling as an example of this decline. While bowling has increased in recent years, less people are joining bowling leagues. They are now more isolated, preferring now to bowl alone.

The Connections We See between Social Trust and Social

Capital •We view Social Trust as an element of Social Capital. Trust is necessary to promote civic virtue, which is similar to social capital.•In our opinion, social capital leads to interpersonal trust, which then leads to social capital as a whole. This social trust and eventual interpersonal trust then creates the networks and civic organizations necessary for social capital.

Social Trust, e-Commerce, and Deliberative Democracy

•We view the way in which laws and discussion take place as a result of forums and product reviews about online shopping to be a form of deliberative democracy. •e-Commerce and the resulting question and answer forums as well as product reviews are a way for citizens to participate in democracy. •Examples of these forums include the Trust and Security section on eBay.com and product reviews can be seen on Amazon.com

More Social Trust, e-Commerce, and Deliberative Democracy

(Direct Connections)

1.Policy-making/ law making/ verify credit card/ verify social ID2.Progresses with e-commerce 3.Taxation in China (http

://english.people.com.cn/90001/90778/90860/6883574.html) 4.Online shopping dispute regulation5.Cyber scams (

http://www.guardian.co.uk/money/2010/oct/02/online-shopping-spam)

More Social Trust, e-Commerce, and Deliberative Democracy

(Indirect Connections)1. Socially trusting

individuals tend to be politically trusting.

2. Social trust is essential to maintaining a stable and effective democracy.

3. Social trust between citizens makes it easier, less risky and more rewarding for them to participate in community and civic affairs.

Sources1. http://wn.com/Diana_Mutz2. http://www.youtube.com/watch?v=43ObnRAKN7Q3. http://www.infed.org/biblio/social_capital.htm4. http://www.hks.harvard.edu/about/faculty-staff-directory/robert-putnam5. http://www.bowlingalone.com/6. http://pages.ebay.com/services/buyandsell/idverify-login.html7. http://www.libertytimes.com.tw/2005/new/oct/17/today-e6.htm88. http://blog.sina.com.tw/market/article.php?pbgid=15863&entryid=5389. http://english.people.com.cn/90001/90778/90860/6883574.html10. http://www.guardian.co.uk/money/2010/oct/02/online-shopping-spam11. http://www.fbi.gov/cyberinvest/escams.htm12. Mutz, Dianna C. (2009). “Effects of Internet Commerce on Social Trust.” Public Opinion Quarterly. 73 (3): 439-461.