JAIT - A Review of Online Trading and User Perceptions of Usability and Trust

Journal of Advanced Internet of Things
(2012) 1: 1-23
doi:10.7726/jait.2012.1001
Review
A Review of Online Trading and User Perceptions of Usability

and Trust
Rebecca Davies and Stuart Cunningham*
Received 3 April 2012; Published online 29 September 2012
The author(s) 2012. Published with open access at uscip.org
Abstract
This work ties together existing literature relating to the functions and contributions of eBay and online
trading, discussing them in a cohesive, meta-analytic fashion. To further increase knowledge in the field, two
studies have been undertaken to present a view of current online trading practices in the United Kingdom
(UK). Data was collected by conducting online questionnaires and performing interviews using the Repertory
Grid technique. This method has its roots in Personal Construct Psychology and allows for the expression of
participants perceptions and preferences in their own terms or personal constructs.
Investigations found that eBay is considered by the public to be the place to take part in online auctions,
despite the availability of other ways to buy therein. Multi-channel retailing considers eBay a separate
channel. Local retailers, however, are venturing into independent online retailing rather than opening eBay
stores. Shoppers make purchase decisions based on several factors and select different purchase methods
dependent on personal preferences, need and mood. Reputation on eBay is still a major factor in purchase
decisions. Astoundingly, some users suspect that they have been victims of auction fraud but have chosen not
to report it.
This study demonstrates how activity conducted online can have implications across multiple sectors. In
particular, the concepts of trust, reputation, change in methods of commerce, and social interaction are
discussed in the domain of the emerging Internet of Things (IoT).
Keywords: E-commerce, online auction, eBay, economic change
1. Introduction
The Internet has had a nationwide socio-economic impact. The British government is so convinced
of the benefits of digital inclusion that a new cabinet-level post has been created to deal with it, so
that digital inclusion features alongside matters such as health, transport, environment, treasury
and defence. Some of the most popular websites in the UK are social networking sites, Google and
eBay.
*Corresponding author:
Creative and Applied Research for the Digital Society (CARDS), Glyndr University
E-mail: [email protected]
Rebecca Davies, Stuart Cunningham / Journal of Advanced Internet of Things (2012) 1: 1-23
Human society and culture are built on social interaction. People are adept at interpreting the
behaviour of others given appropriate verbal and non-verbal cues. Online, the absence of many of
these cues present challenges to communication, but it hasnt stopped online communities sharing
a common interest by developing their own cultures. For example, the eBay community is made up
of millions of buyers and sellers and is built around a reputation system, the Feedback Forum
(eBay, 2010).
The aim of this study is to begin to measure the effect of online auctions and trade activity on users
and stakeholders. The work in this paper is focused upon users and businesses in the UK. To date,
these effects have not been addressed in any organised and systematic detail and this study seeks
to fill that gap in existing knowledge as well as act as a foundation upon which future work may be
based.
The findings of this work are presented alongside discussions of the key concepts of this work in
the IoT. Initial research and dissemination around the IoT has largely focused upon the
frameworks, strategies, applications, and benefit likely to be experienced in the IoT world.
However, research and discussion are now slowly beginning to address the security issues the IoT
hsd. The work presented here focuses mainly upon electronic transactions and user perceptions of
security and confidence therein. It is proposed, therefore, that many of the concepts touched upon
in this work are likely to be transferrable to the IoT and the emerging barriers in security and
implementation that could hamper its development and uptake.
1.1 Research Methodology
During the initial research phases, it became apparent that current literature on the subject is
largely limited to online magazines, the media and public opinion sites. Much of the information
currently available online appears to have similar themes and, while opinions should not be
discounted and can serve as useful indicators of possible trends, they are inherently biased and
subjective.
Reliable, objective data, obtained under controlled conditions, is lacking in this field. It is therefore
proposed that the most effective method of obtaining this data to answer the questions posed is to
consult directly with users of online shopping and auctions to obtain both qualitative and
quantitative data. The research conducted comes from two primary activities: the use of an online
survey, and repertory grid interviews with a sample population. A detailed discussion of repertory
grid and personal construct theory is beyond the scope of this paper, but interested readers are
pointed to the seminal work of Kelly (1955) as an excellent starting-point.
As the subject matter is Internet-based, it is appropriate that part of the research was conducted in
the form of an online questionnaire. While it is noted that this approach might exclude those who
do not use the Internet, the questions raised in this chapter are only pertinent to Internet users. A
total of 114 subjects were raised in the online survey. Not all subjects chose or were required to
answer every question in the survey and therefore each statistic presented incorporates an
appropriate sample size.
1.2 Organisation of Work
The remainder of the paper is organised as follows. First we provide a brief background to the key
areas relating eBay and how the use of technology in socio-economic environments has evolved and
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changed as a result of eBay commerce. Second, the effect of eBay upon everyday users and
consumers is investigated. Third, the paper examines how the practices of businesses have been
changed by eBay. Finally, we conclude and propose areas for future study.
2. Security
2.1 Technological Impact
eBay is inextricable from the technology that enabled its creation. Although the two are not codependent, the relationship between them is certainly co-beneficent. The unanticipated rate of
progress experienced by the technology, Internet and web industries has been mirrored by eBay
and its progress has in turn generated further opportunities and priorities within said industries. At
the core of eBay activity is the facilitation of e-commerce, defined by the UK Department of Trade &
Industry (Cabinet Office 1999) as follows:
...the exchange of information across electronic networks, at any stage in the supply chain, whether
within an organisation, between businesses and consumers, or between the public and private
sector, whether paid or unpaid.
The age-old concept of seals of approval from trusted third parties has been capitalised on in the
Internet environment. The third party role was taken on by a Certificate Authority (CA); TRUSTe
and VeriSign are well-known examples. A CA is able to issue a digital certificate, which is assigned
for a given period and contains information about the identity of the certificate holder and their
public key. The holder is then permitted to display the CA logo as a visible seal of approval. Ecommerce retailers often display the logo on their online shops in an attempt to assure users that
their website is secure and they are reputable retailers. Despite this, Princeton Research Associates
(2002) found that a significant proportion of users found their presence unimportant and the
VeriSign logo had been spoofed (Wildstrom, 2005).
In their proposed framework, Xiong, Zhou and Liu (2011) define a role for third party authorities to
play roles in user authentication. An interesting suggestion is made, indicating that Xiong, Zhou and
Liu believe that the user will be the most active and important element of security in the IoT, a
concept that has been largely neglected in previous security models. This is a reasonable proposal,
given the mobility of users, coupled with their use of many technologies for a wide range of tasks.
Ukil, Sen and Koilakonda (2011) take this concept of user-led security further and propose high
security measures be deployed at the device level. Although not explicitly stated that they will be
user devices, the rationale for their work is that devices will be highly mobile and of a small scale.
We can therefore infer that these are likely to be devices carried by, or in close proximity to, mobile
users. Encryption and authentication play vital roles in the adopted technologies, although the
users understanding of their interactions with others was not explored.
A particular area of relevance to the work in this paper is the integration and interconnection of
Radio Frequency Identification (RFID) and geographic tracking mechanisms in physical products.
Siror et al. (2010) for example, describe worldwide trade scenarios and how the use of IoT
technologies can be used to enhance the processes of checking and tracking international
shipments, particularly the inspections required by customs officials. Their use of IoT processes is
primarily to improve the security of shipments through customs inspections and whilst in transit.
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A key point emphasised, in the work of other authors dealing with security technology in the IoT, is
that the factors of risk and efficiency must be balanced. The opportunities described are powerful:
reducing the risk of human error, being able to monitor shipments at all points in the transport
chain, and the ability to instantly report any anomalies or intrusion. Challenges relevant to this type
of transaction, as well as other forms of e-commerce, include counterfeiting, smuggling and piracy.
The use of RFID, tracking and messaging technologies was shown, in simulations, to be effective at
improving the processes and highlighting undesirable actions taking place (Siror et al., 2010).
However, simulation does not always accurately reflect the unpredictability and influence that
human factors can have in otherwise automated processes, particularly when it comes to activities
of an unsavoury nature. The potential for attacks by social engineering, masquerade, spoofing, and
so on is still present, and this is without mentioning the additional opportunities for in transit
attacks, eavesdropping, and packet sniffing afforded by the additional network traffic generated by
networks of RFID and location-aware devices. Therefore, the need for trust, reputation and ways to
measure the trust and reliability of buyers, sellers and other traders in the IoT-enabled world will
still be of paramount importance.
Of course, it is worth stressing that the IoT is not totally dependent upon RFID, and RFID is not a
negative part of the IoT. Indeed, security tasks such as authentication are likely to be embedded
within RFID technologies. While RFID is a good example of an enabling technology, and likely to
play a major role in the IoT, other methods of communication are necessary. However, any method
of communication, particularly where money or goods are being exchanged, requires a degree of
trust between the parties taking place in the transaction. In the IoT, where there are so many
communication parties, we propose that certification authorities, recommendation systems, and,
especially for individuals and small operations, reputation will be essential for users to gain trust.
2.2 Human Factors
The human factor within computing presents challenges that are intrinsically more complex than
fixing exploited vulnerabilities in code. Symantec (Thompson, 2006) reports that while
indiscriminate attacks by viruses and worms designed to work on a wide scale have decreased, they
have been replaced by threats aimed at tricking their victims into divulging personal information.
Confidence tricksters use social engineering to manipulate the trust that humans appear to have in
others. This usually happens in situations where they can personally interact with their targets, for
example, when masquerading as an IT technician and requesting a password to access a network or
personal account (Granger, 2001).
Online shoppers are more likely to be at risk from covert cognitive hacking. This is the practice of
manipulating users perceptions of a particular situation, in order to effect a change in the users
normal behaviours in that situation (Zelkowitz, 2004). Cognitive hacking carried out online has
come to be commonly known by the terms phishing (Furnell et al., 2007) and pharming (Mathew,
Al Hajj and Al Ruqeishi, 2010).
2.3 Trust & Fraud
The advent of the IoT is likely to impact upon online trade and commerce in multiple domains.
However, the majority of available research and commercial publications that deal with the
possibilities, benefits, and interaction challenges of the IoT do not directly address the practicalities
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of security, privacy and trust. This has led Grout (2012) to coin the term [the] Real Internet of
Things (RIoT), reflecting the likely implications and realisations that will take place as the IoT
begins to be widely adopted by the public. This notion is implicitly supported by other researchers
in the field, who have written extensively about the significance of the challenges relating to trust
and security in the IoT (Ukil, Sen and Koilakonda, 2011, Xiong, Zhou and Liu, 2011, Zhou and Chao,
2011). Perhaps put most simply and precisely by Roman, Najera and Lopez (2011), Trust is
essential to implement the IoT.
The IoT is a huge technological innovation, and the anticipated rapid rate of growth and almost
boundless usage scenarios and configurations pose major challenges to security. Xiong, Zhou and
Liu (2011) recognise this and suggest that traditional computer security measures will be unable to
cope with the rapid rate of change and transformation the IoT brings. Their work focuses on the
development of trusted frameworks and describes in some detail the likely hardware and software
mechanisms that can be implemented to achieve security in the IoT world. Measuring and defining
trust is a difficult issue, especially in newly adopted technologies. The work in this paper, through
user engagement, addresses perceptions, understanding and measures of trust within commerce
and auction environments and begins to suggest ways in which users recognise trusted computer
systems, especially in their interactions with others.
A single definition of trust has eluded the disciplines of sociology, philosophy, psychology,
management and marketing (Kracher, 2005). This may be due to the fact that trust is contextspecific and can be looked at from different angles. For example, a marketing manager, a
psychologist and a philosopher might have completely different concepts of it. It has been noted
that trust is also dependent on the trusters own personal disposition (Lumsden and MacKay,
2006). Generally, though it can be said that:
Trust is the extent to which one party is willing to depend on something or somebody in given
situation with a feeling of relative security, even though negative consequences are possible.
(Jsang, Ismail and Boyd, 2007).
Figure 1: Eggers (2000) Model of Trust for Electronic Commerce (MoTEC)

Establishing a model of trust in the electronic environment elicited tangible results. Companies
investing in ecommerce had to understand what it was that customers felt made a company
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trustworthy. The survival of e-commerce depended on successfully incorporating those elements

into business practices in order to communicate trust to customers. Cheskin Research and Studio
Archetype/Sapient (1999) concluded that there were six factors essential to communicate trust:
Brand, Navigation, Fulfilment, Presentation, Technology, and Seals of Approval. Egger (2000) drew
on research from psychology and marketing disciplines and applied it to online trust, developing
the Model of Trust for Electronic Commerce (MoTEC) displayed in Error! Reference source not
found..
Eggers MoTEC describes Pre-purchase knowledge as the opinion that a potential customer has
prior to transacting with a vendor, often based on information gleaned from other sources
essentially, reputation, equated with brand in the Cheskin/Sapient model. The transference of trust
relates to the role that trusted third parties play in providing a seal of approval, again, identified in
the Cheskin/Sapient model. Interface properties relate to the website itself, with Familiarity and
Attitude referring to usability, presentation and site architecture and are equivalent to Navigation
and Presentation identified by Cheskin/Sapient. Informational Content comprises three
components Risk, Transparency and Cooperation, which respectively refer to how open a website
is about financial guarantees, privacy and whether a vendor appears cooperative. The
Cheskin/Sapient model appears to be the more business-orientated of the two, as it considers order
fulfilment and the supporting technology while Egger omits reference to these. It could be said that
the concept of trustworthy technology is a misnomer and that technology must be functionally
reliable (Friedman, Khan and Cowe, 2000) rather than trustworthy. Reputation is different from
other elements in that it is intangible and cannot simply be addressed pragmatically by, for
example, ensuring that policies are written in clear language and that the company contact details
are available and accurate.
2.4 Study Results: eBay & Suspicious Transactions
In order to determine the extent of auction fraud, respondents who had used eBay were asked
whether they had been subject to one or more of a number of potentially fraudulent incidents,
whether they thought the incident was fraudulent, and to whom, if anyone, they reported the
incident. A summary of incidents is reported in Table 1.
Table 1: Suspicious of Unapproved eBay Transaction Practices (n=86)
Which of the following have happened to you following an eBay auction?
%
Participants
I bought an item which was described as authentic or original and found that
11.6
when it was delivered, it was counterfeit
I paid for an item which never arrived
25.6
I bought an item and when it was delivered, found that the item was in worse
23.3
condition than was described
I was sent the wrong item
8.1
I requested a refund on a purchase but never received my refund
3.5
A seller suggested that they might leave negative feedback for me if I were to
12.8
complain about poor service
I was outbid in an auction and then received an unsolicited offer from a
8.1
different seller for an item similar to that which I was outbid on
I have not experienced any incident following an auction
45.3
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Table 1 reveals that a major issue in eBay transactions is the receipt of items whose condition had
been poorly described, but perhaps the most worrying statistic from the results is that 23.3% of the
participants have experienced transactions for which their item did not arrive.
Some respondents had experienced more than one incident and chose to report it to either eBay,
PayPal or their credit card company. The outcome of any incident reports is unknown. No one
reported it to their bank or to the police. Further querying in the survey found that 27.7% (n=47) of
users thought they had been involved in attempted or actual fraud, and only 10 respondents stated
that they had made efforts to report it, revealing that there may be unreported auction fraud crimes
occurring.
3. Consumer Change
3.1 Ascertaining the Impact of Online Auctions
There is anecdotal evidence that the growth of alternative auction sites is hampered by the lower
volumes of traffic they attract compared to eBay. Information on whether consumers have
knowledge of alternative auction sites might inform marketing strategies to raise awareness and
ultimately enable alternative auction sites to be more competitive.
Advice given by the Auction Guild (2008) regarding separate debit or credit card accounts for
online shopping is supported by the UK Payments Association (2008), the trade association for the
UK payment service industry. Whether these recommendations are followed by online shoppers
will provide insight into the current security perceptions and practices of online shoppers.
3.2 Reputation Systems
Reputation is a key component of building trust. People use information about their own or others
prior experiences in a particular situation as an indicator of what to expect in a future similar
situation. Historically, people interacted within small communities and the spread of information,
and therefore reputations, was limited by geographical and social boundaries. Such boundaries
became far less limiting as a result of the Internet. However, establishing a reputation within a
global community presented challenges because of the widening of boundaries. The Internet was to
be both the source of the problem and the tool with which to develop a solution (Jsang, Roslan.
and Boyd, 2007). Technology facilitates the recording, gathering and publishing of information, and
information on transactions is essential for customers to build a picture of the performance of
online vendors. Thus began the development of reputation systems. Resnick et al. (2000) describe
an effective reputation system as one where:
1. Information about interactions is captured, recorded and made available to others. All three
component activities are crucial. The participation of users is essential, since without
individual contributions ever being made, noted and displayed to an audience, a reputation
system would not exist.
2. The information provided must be relevant and actually used to inform decision making.
3. People or organisations who are rated must be long-lived within the system, and potential
customers should be able to expect that they will be able to transact with that person /
organisation. An online identity is easily changed and enables associated reputations to be
effectively erased.
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The simplest reputation systems use a binary scoring process where a rating is either positive or
negative and overall ratings are given as the sum of all scores. More complex and maybe more
informative systems attempt to ensure that vendors are rated on their performance in certain areas
and users are allowed to rate them according to certain predefined criteria, i.e., delivery time, price
and product quality. Contributors to online fora and product review sites are rated on both the
volume and quality of their posts. Some systems produce final scores as the average of all supplied
ratings whilst others assign weightings to comments depending on the source of the rating. Links
from high profile, popular sites have higher values than those placed on sites dedicated to link
backs (Brin and Page 1998). Systems proposed by academics, although more complex still, may
more closely resemble human decision-making processes as they consider previous performance
and present results probabilistically (Jsang, Roslan and Boyd, 2007).
Reputation systems face the challenge of encouraging users to contribute, and this problem is
compounded by the fact that even once ratings are submitted, there are no guarantees that any
scores and comments provided are truthful or accurate. The incentive to contribute is individual to
the reputation system and the contributor. Product review sites offering financial incentives, blogs
and fora provide improved status within that community and participants in reputation systems
implemented within auction sites may do so in the hope that the act is reciprocated.
Recent work by Atzori, Iera and Morabito (2011) presents a different view of the role that trust
plays in IoT architectures. Rather than the conventional thinking that trust is required between
users and organisations transacting over the IoT, their work proposes that trustworthiness needs
to be established at a device level. Touching upon some of the similar concepts relating to
reputation in this work, Atzori and colleagues framework of inter-device trustworthiness draws
upon social network concepts of centrality and prestige, in exploring their Social Internet of Things
(SIoT).
3.3 The eBay Feedback Forum Reputation in Action
The eBay Feedback Forum is a reputation system developed to support the development of trust
within the eBay marketplace. Providing feedback is optional. Each user has a basic feedback profile
comprising of three parts, all of which are visible to all other users. The first part, a numeric
feedback score, is determined using a simple scoring system where the parties engaging in a
transaction rate the transaction as either positive (+1), negative (-1) or neutral (0). The feedback
score is the cumulative total of all scores received and is displayed as a number and as a percentage.
The percentage can be misleading, since all sellers who have completed every one of their
transactions successfully would each have a feedback score of 100%, regardless of the number of
transactions. As well as scoring a transaction, users have the option of adding a supplementary
short comment, which makes up the second part of the feedback profile. The third part of the
feedback profile is the recently implemented Detailed Seller Ratings, where four areas directly
relating to the transaction (accuracy of item description, communication, delivery time, and charges
for postage & packaging) are rated on a scale from one to five, five being the highest. Empirical
observation suggests that the chief motivator to provide feedback on transactions is to increase
ones own scores. As feedback is proportionately linked to reputation, a good feedback score is a
way of proving ones good reputation and increasing the chances of successful trading (Resnick, et
al., 2006).
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Standifird (2001) studied the impact of feedback on eBay and found that negative comments had a
disproportionately greater influence than positive ones. Khopkar, Li and Resnick (2005) speculate
that negative feedback may even be psychologically detrimental to sellers. On the other hand,
positive feedback is valued highly and both buyers and sellers have been observed attempting to
enhance their own feedback artificially, i.e., such as buying and selling high-volume, low price goods
for the sole purpose of leaving and receiving positive feedback (Brown and Morgan, 2006). An
established seller with a good feedback rating may see her items selling for higher prices than a
new seller with less feedback (Resnick, et al., 2006) suggesting that buyers want to trade with
sellers who have good reputations. However, negative feedback has been seen to be
disproportionately disadvantageous (Lucking-Reiley, et al., 2007) when compared with the
measurable economic effect that positive feedback has, i.e., sellers with negative feedback fare
worse financially than would be expected. The same study identified that users are swayed more by
comments and negative figures than they are by the overall feedback score. It appears that some
buyers will disregard the fact that a seller might have completed 99% of all transactions
successfully, and allow their decision to trade with that seller to be influenced heavily by the 1% of
unsatisfactory transactions.
It has been observed that slightly more than half of completed transactions receive feedback
(sellers receive feedback for 52.1% of transactions, buyers receive feedback for 60.6% of
transactions), but 99%, an overwhelmingly large proportion of transactions, are rated positively
(Resnick and Zeckhauser, 2002). Although, the authors themselves suggest that their data may
overestimate the number of positively rated transactions, it was suggested that the extremely low
percentage of negative feedback was highly suspicious. Negative feedback is also worse for sellers
than it is for buyers. A seller builds a business (which may generate their sole income) on their
reputation, while a buyer with a less than good reputation can change their identity or shop
elsewhere. Sellers are able to cancel the bids of buyers they do not think will be good customers,
but may face difficulties if they have a large number of auctions, especially since it is so easy for
buyers to adopt a new identity.
It was observed that when buyers left negative feedback about a seller, some sellers reciprocated
(Resnick et al., 2000). As a result of the threat of unjust retaliatory feedback, buyers reportedly felt
unable to express their honest opinions about transactions. In February 2008, eBay announced that
changes were to be made to eBay Feedback Forum so that sellers could no longer leave negative or
neutral feedback for buyers. Prior to this, Jsang, Roslan and Boyd (2007) called the eBay system
primitive and made the suggestion that sellers should not be able to rate buyers, however, eBay
may have already been considering this option themselves. But the fact remains that the system
appears fit for the purpose within its context, a point that is made by Resnick and Zeckhauser
(2002). When reputation systems are the topic of study, eBay Feedback Forum is often a reputation
system of choice (Resnick and Zeckhauser, 2002; Gregg and Scott, 2008), despite the fact that it is
flawed and potentially open to abuse.
Multiple, disparate reputation systems pose a problem for users wishing to use good reputations
built in one place to support similar activities in other places on the Internet. This was particularly
relevant for traders and experts. EBay feedback had come to be considered as valuable outside the
eBay marketplace, as sellers quote their feedback scores on their personal websites (JTK, 2008).
However, talk of integrating reputation systems was silenced when eBay determined that feedback
was proprietary and was only intended as a tool to facilitate trading in the eBay marketplace (Clark
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1999), implying that feedback actually belonged to eBay, Inc., rather than to well-behaved and
honest traders. eBays stance currently remains unchanged (eBay, 2008) but the desire of
individuals to use their hard-earned reputations wider than the eBay marketplace continues (JTK,
2008). This may have the effect of locking a trader into continuing to trade on eBay, given that
starting again elsewhere outside of eBay would effectively be building a reputation and a business
from scratch.
3.4 Study Results: Reputation & Feedback
In our eBay user survey, participants were presented with the following scenario:
You are shopping for an item on eBay and you find it is for sale in two places. Would you rather
buy the item at a higher price from a seller with a high feedback rating or at a lower price from a
seller with a low feedback rating?
The results of the survey reported that 72.3% (n=101) of those surveyed would buy the item at a
higher price from the seller with higher feedback, whilst the remaining 27.7% would choose to pay
less for the item with the seller with a lower feedback rating. This shows that the majority of eBay
users rely on and trust feedback ratings when making a purchase, demonstrating that even during a
recession, shoppers will pay higher prices when they think they can trust a retailer. From this, it
could be inferred that trust has greater socioeconomic weight than purely fiscal incentive.
Respondents were asked whether they leave feedback after conducting eBay transactions. 80%
(n=85) stated that they leave feedback after every transaction, 10.6% leave feedback for around
half of all transactions and 9.4% never leave feedback. Respondents who volunteered information
via email about why they never left feedback made the following qualitative comments:
I don't leave feedback, as I've made it a policy of mine not to do so. I could spend a lot of time
fill[ing] in all the on-line surveys and feedback requests which I'm asked to complete and consider
it to be for the benefit of the seller/company and that I will get an extremely small benefit from my
time, which is taken off me in such a blas manner. I even struggle with sending error reports to
Microsoft when there is a problem, as I have to wait an extra second or two!... I must be very
impatient. I'd rather spend the 5 minutes, or whatever, sending an email to someone I love or care
about. I'm also suspicious of how much notice is taken of the results of such surveys - having
worked in marketing for many years, Ive seen unpopular research results buried on occasion.
This draws attention to the principle that people supplying feedback like to see how that feedback
has been used, and also offers an insiders view of the perceived usefulness, or otherwise, of it.
Another shared this view that demonstrates that not everyone who uses eBay wants to contribute
to the community:
combination of reasons really. Once I have made a purchase I don't think about it anymore, but
mainly I am very irritated by sellers who rate me as a superb purchaser / thoroughly recommended
/ 5 stars, etc., etc., just so that I will rate them in the same way.
Of all participants, only 10.3% (n=78) felt that they wanted to be able to use their eBay feedback
and ratings in other online environments. A number of participants offered further explanation of
why this would be important to them. Some of the comments recorded were as follows:
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For some of my hobbies, I sell items in the 100-600 GBP price range (on a forum that only allows
direct sales for instance); its reassuring for people who dont know me to take a look at my eBay
feedback.
Another participant responded with:
I dont have a specific purpose in mind for my feedback, its just it feels like a badge of honour,
something Ive earned by being a responsible user of the system and an indicator of my honesty,
reliability and trustworthiness. In part thats because eBay is so ubiquitous that it means something
coming from that site.
The comments obtained indicate that feedback and reputation are highly important, added value
features of online trading, particularly at the level of users privately buying and selling items. The
use of the reputation system appears to be effective in countering the lack of person-to-person
contact that would normally be encountered in a private transaction such as buying a car or bike
from a neighbour.
3.5 Bidding, Buying and Selling on eBay
The way that users trade on eBay has been the subject of much attention. Auction theory and its
application to eBay activity have identified bidding strategies exclusive to online auctions (Shah et
al., 2002). Sniping is a phenomenon seen in online auctions and is the practice of submitting a high
bid at the very last moment, leaving other bidders no time to counterbid. Software agents have been
produced to automate the process although it can be carried out manually. It is a controversial
activity, but permissible by eBay rules, and it is a proven effective strategy (Roth and Ockenfels,
2002). The analysis by Rogers et al. (2007) on the value and timing of bids presents some
interesting strategies for buyers who engage in the practice of auction sniping, suggesting a wouldbe sniper might be most successful if they attempt to be the first sniper to snipe. Ward and Clark
(2002) found that buyers might get the best price by bidding using a minimum increment bid style
whereas inexperienced bidders who place proxy bids early on in the auction can drive the final
price up. Purists advocate considering an absolute maximum bid, placing a proxy bid to this amount
and then waiting until the auction closes. In reality, this does not happen. Other buyers attempt to
reveal another buyers proxy bid by placing incremental bids until they are the highest bidder. The
proxy bidder might then engage in an emotionally charged bidding war. Experienced eBay users
endorse sniping as a strategy to avoid shill bidders and to avoid getting involved in bidding wars
that inflate prices. While the practice is legal and effective, it will continue.
4. Business Change
In the beginning, eBay actively recruited sellers that were not established household name retailers
they wanted private collectors, car-boot sellers and householders to be members of the eBay
community. As it grew in popularity, the eBay marketplace gradually attracted branded retailers
and people with an entrepreneurial streak, eventually growing so large that it came to be regarded
as a completely individual retail channel.
Attitudes towards the use and reuse of goods have changed as environmental and economic factors
begin to affect consumers choices although it was the trade of secondhand goods which eBay first
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encouraged. Such a discussion would not be complete without a look at how eBay online auctions
compare with the traditional auctions on which it was modelled.
4.1 Online Trading
At the start of 2007, small enterprises (1 50 employees), micro-employers (1 4 employees) and
sole proprietors made up 99.3% of all private enterprise in the UK (BERR, 2008). When the number
of medium sized enterprises is added, this figure rises to 99.9%. Sole proprietors accounted for
almost three quarters of the total amount of private sector enterprise in the UK, demonstrating that
entrepreneurship is popular. Large enterprises (500 or more staff) comprise the remaining 0.1% of
private UK enterprise although they generate just under half of the total turnover. It could be
argued that large income streams can only be accommodated by large companies that have the
necessary infrastructure and resources. The exception to this might be if an individual has a skill
that results in high value products, for example, artists, musicians and actors.
Even though Internet consumers pay lower prices, there are non-financial costs associated with
online shopping. Internet shoppers sacrifice their privacy and although legislation exists to protect
personal data, online retailers gather click-stream information as consumers browse and shop
online, which enables them to personalise services and launch advertising campaigns targeted at
the individual. Retailers can potentially use recorded consumer preferences to determine how
much an individual consumer is willing and able to pay, and can then adjust their prices
accordingly. Internet shoppers often incur the financial cost of delivery, which includes the time
spent waiting at home for deliveries and visiting the local Post Office or collection depot for missed
deliveries.
In 2005, the number of people in the UK who traded on eBay to generate either a regular
supplementary or sole income was estimated at 50,000 (Blakely, 2005). In 2007, Her Majestys
Revenue and Customs (HMRC) issued guidance for people trading online via eBay, making a clear
distinction between those who were selling unwanted items and those whose activities had an air
of commerciality (HMRC, 2007). HMRC reported that in the first two days of their campaign, 200
people registered as online traders (Crimson Business, 2007) although it was unclear what
proportion of these did so as a direct result of the campaign.
Ju and Li (2011) describe scenarios where the IoT actually serves to combine Internet-based
shopping and real-world, physical shopping activities. Their work describes the applications and
enhancements that the IoT is likely to bring about in the commonly experienced activities of
supermarket and grocery shopping. In terms of the challenges presented by this mode of shopping
interaction, the authors identify the need for the logistics processes to be reliable and accurate
along with the need for the quality of goods received to be of an acceptable standard. However, it
could be argued that these are not new challenges to achieving more efficient commerce in the IoT.
Work by Shen and Liu (2010), though largely concerned with the RFID approach to the IoT, clearly
indicates views that the IoT will have revolutionary change effects upon electronic commerce and
the quality of commercial services. Their work reports upon the successful implementation of RFID
tagging in improving logistics and stock management systems. An interesting dimension of their
work proposes that efficiencies can also be realised in the manufacturing process, through the
monitoring of materials and manufacturing processes. However, whilst the authors indicate that
12
changes are on the horizon in commerce and trade, the authors do not propose any specific new
models or methods.
4.2 eBay and Business Change
Before eBay existed, bric-a-brac and old clothing could be found on sale at jumble sales, car boot
sales and charity shops. Charity organisations with shops seized the opportunity to access larger
markets (Derbyshire, 2005) and opened their own eBay stores. However, the Co-operative Bank
Ethical Consumerism Report (Co-operative Bank, 2008) found that charity shop trade fell by 18%
between 2006 and 2007. One reason for this may be that charity shops received fewer items as
donors began to sell their unwanted items on eBay instead of donating them. Charity organisations
use a variation of the Drop Shop scheme popularised in the USA. This scheme is provided for people
who want to sell their items on eBay but do not have the inclination or resources to do it
themselves. Organisations charge a fee for this service and give donors a portion of the final value
of the item if it sells.
As a result of a brief joint venture between Sothebys and eBay in 2002, Kazumori (2003) was able
to compare sales of goods sold in traditional auctions with the sales of similar goods sold via eBay
auctions. It was identified that goods fetched higher prices when buyers were able to more
accurately determine the value of the item. In an online environment, buyers are largely reliant on
photographs and written descriptions to give them information about a sale item. Further
investigation reveals that buyers are willing to pay when they know exactly what they are bidding
on.
A study commissioned by eBay reports that over 170,000 eBay users in Europe rely on the income
generated by their eBay sales (Nielsen Net Ratings, 2005). Studies by Ellis and Haywood (2006),
Miles and Davidson (2005) and Amelang (2005) explored peoples motivations for doing so.
Entrepreneurial tendencies aside, most eBay sellers enjoyed the greater degree of independence
they felt that being their own boss afforded them. People not formally employed due to social or
geographical reasons, for example, parents of young children, disabled people, young people and
those who live in a locations far from work, were no longer excluded from employment. Being an
eBay trader gave people the opportunity to earn money, contribute to the economy, participate in
the eBay community and actualise their own personal ambitions.
4.3 Study Results
An initial point of discovery was to assess the level of identity consumers associate with shopping
conducted via eBay, whether this is through private sellers or a corporate eBay presence. To do
this, survey participants were asked how they described an item that had been purchased via eBay.
The results are presented in Table 2. The results shows that the significant majority of those
surveyed feel that the best description of their item, regardless of the sellers status, is that it was
purchased on eBay itself, as opposed to a specific retailer or generic description of an Internet
transaction.
In a follow-up enquiry, we recorded 41.2% of eBay users (n=85) make repeat visits to particular
sellers. However, this split is still significant since it suggests a large number of users will make
subsequent transactions with an eBay trader, further enforcing the view that eBay helps facilitate
online trading in a controlled and comfortable environment. Even though a retailer might have
their own website that they trade through, eBay may be the preferred option, rather than users
13
worrying about dealing through multiple, unknown websites. In this regard, participants were
presented with the following scenario:
Table 2: Described Identity of an Item Purchased via eBay (n=88)
When you are describing a purchase that you made via eBay, how would you %
describe WHERE you made that purchase?
Participants
I bought it on / from eBay
86.4%
I bought it online / on the Internet
11.4%
I bought it from a seller who has a shop on eBay
2.3%
If you are looking to make a purchase on eBay, do you investigate whether a seller has a different
shop, independent of eBay?
The response to this was almost evenly split. 42.5% (n=87) of participants answered positively.
4.4 Consumer Attitudes toward Purchases
Repertory Grid interviews were conducted to identify attitudes towards purchasing, given that
consumers have more options available to them today. The following elements were used: Mail
order catalogue; Car boot sale; High Street shop; Online shop; Charity shop; Online auction; and
Classified newspaper advert. One participant added an additional element: word of mouth; but this
has been removed from our analysis to prevent skewing of results.
Eleven interviews were carried out, six subjects were male and five were female. The subjects age
range varied between 25 and 61 years. The subjects had a broad range of IT literacy, ranging from
those who very rarely used computers themselves and instead relied on others to do things online
for them, to those who were technically adept IT professionals. The Web Grid IV (2009) software
was used to analyse the results of the repertory grid interviews. A representation of the repertory
grid, with elements and constructs grouped according to cluster analysis, is shown in
Figure 1. A PrinGrid, which uses Principal Component Analysis to map constructs and elements on a
Cartesian plane, is presented in
.
The diagram indicates that car boot sales, charity shops and classified newspapers are perceived as
being broadly similar. Online auctions, online shops, high street shops and mail order catalogues
can similarly be grouped together in a different set. Newspaper adverts and car boot sales are seen
as places to go for a potential bargain and for secondhand items. Subjects talked a lot about the
uncertainty of the purchase process, how they would expect to bid, haggle and negotiate. The
element of chance also related to the range of items, as consumers thought that a broad range of
unexpected items are available. One subject made the following interesting comparison:
Car boot sales its eBay in a field! (Subject #5)
Online auctions appears to be the furthest from any other element, which may demonstrate that
consumers view online auctions as different from all the other elements, distinctly individual. It is
perhaps correct that online auctions are regarded as a separate channel.
14
Mail order catalogues and high street shops were seen as similar, with customers expecting to buy
good quality, brand new goods, pay pre-determined, higher prices, receive services governed by
high standards and know that purchases are refundable and guaranteed. People who use these
methods are usually intent on making a purchase rather than browsing.
It is interesting to note that sometimes subjects used similar descriptions but for different reasons.
Properties of elements are interpreted by the individual according to their own preference. For
example, two subjects used convenient to describe elements. The first considered online shopping
convenient as it did not involve leaving the house to make a purchase, whilst the second considered
it more convenient to be able to return a purchase to a physical shop for a refund. One subject
preferred being able to handle goods and speak with the seller at a car boot sale and therefore
considered the fact that online shopping was done at a distance as a negative. In contrast, another
subject considered exchanging social niceties often undesirable (the subject was a parent with a
young family and enjoyed a peaceful, quiet and efficient transaction).
Perhaps unsurprisingly, the charity shop was different from the others in that it was the only
element that was seen as having charitable and ethical traits, and it was generally not seen as being
associated with any uncertainty. The words used to describe how people viewed charity shops
involved people and interaction with people, getting involved with other people, and being able to
handle the goods.
15
Figure 1: Cluster Analysis of Repertory Grid

16
Figure 2: PrinCom Analysis of Repertory Grid
17
Conclusion
In the UK, technology has enjoyed widespread acceptance. Central government initiatives to make
technology available to the whole of the UK and all of its citizens support the fact it has, and will
continue to have, an impact nationally on all sectors of society. Those who choose not to accept it
may see it impact negatively on them as they become digitally isolated. The Internet is a tool; and is
only as useful as the websites hosted therein. People use it to enhance and augment aspects of their
lives, so clearly the question is not whether it has an impact but how it impacts them. eBay is now
over fourteen years old and lives alongside other Internet giants, such as Google and MSN, yet
compared to them, it has a very limited portfolio of services, mainly online auctions. Fourteen years
in Internet years is a long time so eBays longevity points to global acceptance and therefore a
positive impact of online auctions.
This study found that eBay remains a popular place to buy and sell items. Trading via eBay, whether
honestly or dishonestly done, is a way of life for some and keeps roofs over heads and enables them
to achieve personal ambitions. Crime, despite being carried out with malicious intent, fosters
innovation and creativity in circumventing security measures and as long as there is the temptation
of financial gain and anonymity, technology security experts and law enforcers can be assured of
job security.
Trust remains an important factor in the decision to buy, even when buyers have less money to
spend. Users rely on feedback to provide an indication of the sellers reputation, demonstrating that
they believe in the system and most users consider feedback to be part of the transaction and
willingly contribute. Inasmuch, it is fit for purpose. A combination of continuing engagement, belief
in the system and eBays global reach have led to an online reputation system becoming considered
an indicator of offline trustworthiness. The source of this overlap between online and offline world
is, of course, the users. Users believe in the reputation system and they participate, demonstrating
that it is fit for the purpose. This study found that good reputations online are seen by some as
indicators of trustworthiness offline. In terms of online and multi-channel retailing, it is
understandable how a retailer might use this as part of their overall brand.
A new retail channel developed as the popularity of online auctions grew, and as eBay has not had
any serious competitors, it has become, by default, the new retail channel. Consumer knowledge of
alternative online auctions is very limited and their use of them is even less. Amazon Marketplace is
not in direct competition with eBay because it does not offer the auction format but does provide
C2C ecommerce. This study looked at how situations have changed, for example, the use of eBay
and users knowledge of other exchange initiatives online. Attempts to determine changes can only
be made successfully when a previous state in time is available for comparison and no such
baseline was available.
We took a broad view at the subject of eBay whereas many of the works cited scrutinised one
aspect. This study highlighted multiple areas of interest warranting further investigation but had to
be limited due to time and scope of contact constraints. How eBay has affected third parties will
arguably elicit results that identify the true socio-economic impact of eBay. Engaging multi-national
companies, particularly couriers and banks, to supply information about the activity they see as a
18
result of eBay was not possible for reasons given. It is proposed that such an investigation would
form the basis for future work that builds upon our research to date.
Online auction and user-to-user trade sites, such those explored in this paper, are one of the few
established technologies where user authentication and trust are of paramount importance.
Therefore, the research and information uncovered here is likely to be transferrable to the
application of IoT user security research; especially in commerce and trade scenarios. Roman,
Najera and Lopez (2011) stress the importance of user comfort and feelings of safety in the IoT,
strengthened by external agencies and governance. Both of these elements are investigated for
online trade within the established Internet model.
As the IoT becomes more developed, the impact of this technological change will be increasing
noticed and felt by everyday society. At the core of many issues surrounding the IoT and user issues
is trust. As explored in this work, trust becomes important in the IoT world at many levels. From
the available literature, there appears to be four broad categories where trust is going to play an
important role. Trust needs to be embedded:
Between users: Confidence in exchanging information between peers whether this be social
information, financial transactions, etc. Users need to be comfortable and confident about
the person they are communicating with. Reputation is important, although this may be
measured by more social means.
Between users and organisations: Users must have ways to authenticate businesses and
organisations, and vice-versa. Certificating Authorities, whilst serving as intermediaries,
may be relevant, although these may be seen as cumbersome in many of the peer-to-peer
communications of the IoT. Reputation is likely to play an enormous part in this exchange
and is likely to be an expanded form of the reputation systems seen in online auction sites
and online price comparison sites.
In technologies: User trust and security in the devices and software they use to
communicate. Users and organisations must have assurance that technologies are not
performing tasks or sharing information in ways that are undesirable.
Between devices: In some ways a devolution of trust between users. In the fluid exchange of
information the IoT requires, devices should be able to make decisions about the type and
scope of information to be exchanged with other devices in the IoT.
These required areas of trust are not exactly new contributions or realisations. Many of these
interactions, perhaps with the exception of inter-device trust, already take place today, although
they are only now starting to converge in the way anticipated in the IoT. For example, social
networks and personal mobile devices, such as smart phones, have provided us insight into the
types and volume of information users are prepared to share with one another. Authentication,
reputation and encryption enabled many of the paradigm shifts in online commerce detailed in this
work.
Any activity within an interconnected society will impact some other part of that society. Things
happen because of eBay on a daily basis and this study has touched on only some of them. Parcels
get packaged what effect has this had on the production and sale of packaging? Data gets mined
how has this contributed to the development of algorithms? Buyers and sellers experience joy and
disappointment is there such a thing as auction addiction? Whether you think that eBay is future19
proof or has lost the magic, it has already affected multiple histories Internet, business, social,
academic and personal.
It is the convergence of technologies, challenges and stakeholders that compound the existing
challenges and make the need for mechanisms to measure and control trust essential in the IoT.
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Figure 1: Eggers (2000) Model of Trust for Electronic Commerce (MoTEC)

trustworthy. The survival of e-commerce depended on successfully incorporating those elements

Figure 1: Cluster Analysis of Repertory Grid

Figure 2: PrinCom Analysis of Repertory Grid

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