3. Trust in Face-to-Face and Electronic Negotiation in Buyer–Supplier Relationships: A Laboratory Study

The purpose of this chapter is to study the role of pre-existing trust as a key factor for successful buyer–supplier relationships in electronic versus face-to-face negotiation mechanisms. It is known that e-sourcing can damage the buyer–supplier relationship, whereas face-to-face discussions can help elicit collaboration intentions and build trust. However, it is less recognized whether having established a prior trusting relationship can positively affect outcomes and strengthen the relationship even when electronic mechanisms are used. We explore such an issue by conducting a laboratory study which compares three negotiation mechanisms (i.e., face-to-face negotiation, e-mail negotiation, and e-reverse auction) across two pre-existing levels of buyer–supplier trust (i.e., high-trust and low-trust) in terms of their impact on perceived relational outcomes. Results confirm that higher pre-existing trust is linked to higher relational outcomes than low pre-existing trust; face-to-face negotiation is associated with higher supplier’s perceived trust and satisfaction in dealing with the buyer compared to the e-mail negotiation and e-reverse auction. Furthermore, in the context of high pre-existing trust e-reverse auctions may not necessarily undermine existing relationships.