In electronic business-to-business (B2B) marketplaces a basic question is how buyers screen the marketplace for trustworthy sellers. Drawing on signaling theory, we argue that buyers in such marketplaces reduce uncertainty about seller trustworthiness by reverting to any observable signal that sellers transmit either intentionally or unintentionally. Specifically, we advance understanding of buyer-seller contact initiation in electronic B2B marketplaces by proposing that a seller’s legal status and a seller’s geographic location are two valuable and credible signals affecting a buyer’s propensity to contact that seller. We then develop a relational perspective and propose that identical signals have distinct effects in different buyer-seller pairs. Finally, we introduce seller-specific commitment—defined as the level of commitment that a buyer makes to a seller when initiating a contact with that seller—as an important factor moderating the relationship between seller signals and contact initiation. Analysis of unique data on 2,526 buyer-seller contacts realized in a large electronic B2B marketplace during a 17-month period largely supports our predictions.
Keywords: information asymmetry; signaling; electronic B2B marketplace; buyer-seller contact initiation
