Negotiation, Email, and Internet Reverse Auctions: How Sourcing Mechanisms Deployed by Buyers Affect Suppliers’ Trust: How sourcing mechanisms deployed by buyers affect suppliers' trust

The Internet has made a wealth of new tools available to the industrial buyer. However, researchers have suggested that computer mediated interaction with suppliers may not be conducive to strong supplier relationships in general and to trust in particular. This paper compares two computer-mediated sourcing tools (email negotiation and Internet reverse auctions) with face-to-face negotiation. Information richness theory suggests that the different media will produce different impacts relating to sellers’ trust in buyers. Data are generated with a simulation experiment using 117 subjects. We found that information richness affects seller-buyer trust: Sellers who used face-to-face negotiation, the richest medium in the study, always reported higher trust in their buyer counterparts than did sellers using Internet reverse auctions. There were also some trust advantages of face-to-face negotiation over email and limited advantages of email over reverse auctions. We also found that procurement complexity influences the relationship between information richness and trust. As hypothesized, when face-to-face negotiation is used, procurement complexity has no effect on seller trust. When reverse auctions are utilized, the greater the complexity of the purchase, the less the seller trust. However, when email is used, greater procurement complexity is associated with greater seller trust, and there are no differences in trust between the email and face-to-face channels. Finally, we found that sellers’ trust in buyers is positively associated with sellers’ desire for future dealings with the buyer.