The Role of Swift Relationship and Institutional Structures in Uncertainty Reduction

Uncertainty has been regarded as the most prominent barrier in ecommerce. However, how communication between buyers and seller contributes to a reduction in uncertainty is under-investigated. Integrating uncertainty reduction theory and relational contract theory, we develop a model that explain how various communication strategies will reduce uncertainty in transactions so as to encourage purchase behavior. In addition, we also explore the role of swift relationships and institutional structures during the uncertainty reduction process, surveying real buyers as data subjects. The study advances our understanding of communication strategies by specifying the e-commerce context to explore how communication can facilitate purchase behavior through uncertainty reduction. We propose that the communication process between individual buyers and sellers may be moderated by both formal and relational contracts. Also, we add to the existing literature by investigating whether formal contracts will affect a relational contract’s impact in the online shopping context.