Consumers’ Ethical Perceptions of SEPs
Marketing ethics is broadly defined as the systematic study of how moral standards are applied to behaviors, decisions and institutions (see e.g., Laczniak and Murphy
2019). The seminal work by Bartels (
1967) provided the first conceptualization of factors which influence marketing ethics in decision making. Scholars became more interested in the topic and contributed steadily to issues of unethical marketing such as deceptive advertising, dangerous products, and misleading prices. Practitioners became more interested in marketing ethics in the 1980s and professional organizations and companies started to adopt certain codes of ethics in their operations (Agag
2019). Since then, marketing ethics has become a well-established field (Ferrell et al.
2015; Gaski
1999; Schauster and Neill
2017), and review studies have indicated different domains of marketing ethics (see e.g., Laczniak and Murphy
2019; Schlegelmilch and Oberseder
2010). Our aim is not to add to the existing body of knowledge on ethical marketing domains such as sustainability or corporate social responsibility. The aim of this study is to focus on transaction related ethical issues concerning SEPs.
It is widely recognized among researchers that ethical aspects differ in offline and online environments. For instance, ethical transgressions are more likely to happen on online platforms than in face to face transactions (Citera et al.
2005), and consumer’s ethical evaluations are formed in different ways on online platforms and in offline settings (Roman
2007). The Internet in general is often seen as an environment for unethical behavior (Freeston and Mitchell
2004; Hajli
2018). For instance, e-commerce platforms (Bart et al.
2005), social commerce platforms (Nadeem et al.
2017), and SEPs (Sutherland and Jarrahi
2018) are all technology mediated platforms and the ethical concerns of consumers are highly common on these platforms. Sharing personal information online makes consumers vulnerable to both accidental and intentional harm by other consumers (Dinev and Hart
2006; Malhotra et al.
2004).
There is a plethora of studies related to e-commerce ethics (see e.g., Agag
2019; Citera et al.
2005; McIntyre et al.
1999; Miyazaki and Fernandez
2001; Roman
2007). Marketing ethics has also been discussed in the literature on social commerce (see, e.g., Featherman and Hajli
2015; Hajli and Lin; Hajli
2018). Several authors have called for systematically investigating ethical issues related to the advancements in technological platforms (Laczniak and Murphy
2019), and this study seeks to empirically examine them.
SEPs differ from traditional e-commerce/other online platforms markedly, which creates novel ethical challenges, specifically in terms of interaction. In the conventional e-commerce industry, interaction between buyers and sellers remains an exception (Mittendorf
2016): the online platform covers the entire process of the ownership transfer, allowing consumers to purchase goods even without the seller’s prior agreement. SEPs facilitate interaction between service providers and consumers that is fundamental to conducting a business deal. For example, service providers have to comply with the requests of consumers in order to secure business transactions. Therefore, SEPs foster consumer-to-consumer (C2C) interaction before any business deal can take place. In this sense, unlike in e-commerce, private individuals are able to monetize their underused or idle personal resources at a large scale, as micro-entrepreneurs or domestic entrepreneurs (Stabrowski
2017) via SEPs. SEPs only act as intermediaries or enablers fostering interactions and facilitating transactions between consumers and service providers by helping them locate each other in situations in which they may otherwise have been difficult to locate. Therefore, platform mediation in sharing economy is crucial to reducing the impact of uncertainties between service providers and consumers. Hence, the SEPs are charged with the added responsibility of providing an ethical environment for both consumers and service providers in order for transactions to take place.
Given the nature of SEPs, it may become impossible for consumers to make transactions without providing personal information. Becoming a service provider through an SEP and marketing one’s possessions effectively to other consumers requires making a large amount of information publicly available to others even before the transaction occurs. This typically requires revealing personal data (Slee
2017; Sundararajan
2016; Teubner and Flath
2019). Such personal information is published through vivid online profiles including self description in terms of personal profiles, real addresses, real names, real phone numbers, and photographs of one’s residence among other important personal details (Dambrine et al.
2015; Ma et al.
2017). Because the successful marketing of possessions only takes place if the information provided is real and indicates trustworthiness (Huang and Liu
2010). In addition, information about one’s whereabouts, information about the layout of one’s home, such as where the living room, spare guest room or bedroom are, is freely circulated amongst acquaintances, colleagues, and co-workers (Teubner and Flath
2019). This kind of information could remain hidden in traditional e-commerce settings. Yet, not only the SEP service providers but also the consumers are vulnerable. For instance, consumers enter a huge amount of personal data with SEPs, including sensitive information such as addresses, passwords, and credit card information (Acquisti et al.
2016; Dakhlia et al.
2016; Teubner and Flath
2019). Consumers’ personal information is processed further by SEPs to match them with service providers, for setting prices, and monitoring overall behavior to devise better services (Einav et al.
2016). A little negligence, mischief, mistake, or misconduct in the form of server corruption, identity theft or data breach from the SEPs’ side can be of huge concern for consumers (see e.g., TheGuardian
2018). Therefore, it becomes crucial for the SEPs to convey a sense of security to the consumers present on such platforms. Hence, consumers’ ethical perceptions of SEPs cover both their own personal data as well as the ethical behavior of other consumers and the SEP. However, only a few studies have examined privacy related issues in a sharing economy (see e.g., Dillahunt and Malone
2015; Hawlitschek et al.
2016; Lutz et al.
2018; Teubner and Flath
2019), and research related to other ethical aspects remains absent.
Researchers have studied consumers’ ethical perceptions in online settings. In such settings, privacy and security have consistently been identified as the two main ethical concerns (Roman and Cuestas
2008).
Privacy deals with uncertainty linked to personal information that is provided on online platforms, and the risk of such information being exposed to unintended individuals or parties (Bart et al.
2005). Privacy on SEPs refers to the protection of personally identifiable information and protecting it from unauthorized/unwanted use by other consumers (Lutz et al.
2018). Personal information leakage can lead to unsolicited contact from other companies or individuals, unauthorized sharing of that information, or the undisclosed tracking of transactions (Miyazaki and Fernandez
2001). Therefore, consumers’ concerns about their control of their personal information in terms of subsequent use and disclosure are related to privacy concerns.
Security pertains to the notion of uncertainty regarding online platforms that could lead to incurring monetary losses during interaction on those platforms (Roman
2007). Security issues could arise in the form of data breaches because of lapses in security on SEPs or other online platforms (see, e.g., Cadwalladr and Graham-Harrison
2018; Smith
2016) resulting in the loss of personal, financial, or transaction-oriented information. Although the role of privacy on SEPs (Lutz et al.
2018) has attracted some research interest, in the sharing economy context, even these issues are underexplored (Sutherland and Jarrahi
2018). In the sharing economy context, security provided by an SEP refers to the safety of online transactions, including protection from malware and unauthorized access to personal financial information and the safety of payment methods.
Contemporary researchers have also proposed other ethical issues which are potentially important and need to be taken into account in online environments. These include fulfillment/reliability, non-deception, service recovery, shared value, sales behavior, and communication (Agag
2019; Cheng et al.
2014; Roman
2007). Along with privacy and security, we focus on the first four of these issues, as these specifically relate to SEPs. Including these constructs adds multidimensionality, wholeness and greater complexity to measuring ethics than using a unidimensional approach to measure consumers’ ethical perceptions of SEPs.
Non-
deception refers to the notion that SEP service providers should not engage in fraud by relying on manipulative, or deceptive practices to make consumers purchase their offerings and make transactions (Limbu et al.
2011). On SEPs, this kind of fraud involves the unreliable delivery of goods/services and even purposeful misrepresentation. However, the concept has not received much attention in the sharing economy literature (Roman
2010).
Fulfillment/reliability assert the degree to which consumers believe that they are able to place an order as accurately as possible on an online platform (Parasurman et al.
2005; Wolfinbarger and Gilly
2003). This relates to the accurate display and description of the services offered, prompting for order confirmations, and providing good tracking services. The service should be as it has been presented; for instance, if an Airbnb room looks luxurious in the pictures but is not the same in reality, Airbnb has failed to fulfill its promise reliably.
Shared value measures the extent to which consumers and service providers believe the degree to which both have common values regarding which goals, behaviors or policies are right or wrong, important or un-important (Morgan and Hunt
1994). For instance, seeking the permission of the consumer on an SEP for sending the promotional material represents the shared values of SEPs and consumers.
Service recovery deals with the course of actions an online platform service provider takes in case of service delivery failure (Gronroos
1988). This situation occurs when the failure of on an online service provider results in a perceived loss to the consumer. At this point, the online service provider compensates for the damage by providing some gain or means of recovery to reduce the damaging effect to the business and to reassure the consumer. A recovery has to be made so that the consumer reaches a point of satisfaction (Sparks and McColl-Kennedy
2001).
Before introducing our research model for the structure and the role of consumers’ ethical perceptions of the SEPs, we review the literature on consumers’ participation in SEPs and value co-creation. These offer both the essential concepts for our research model and the underlying explanations linking the concepts.
Consumers’ Participation on SEPs
Traditional models of consumption related to e-commerce websites are being substituted by sharing economy platforms as a viable alternative in terms of servitization (see e.g., Cusumano
2015; Hellwig et al.
2015). Sharing economy or consumer-to-consumer (C2C) platforms are two-sided markets, the main entities in which are consumers and service providers. The success of such SEPs critically hinges on the activity of both aforementioned entities (Teubner and Flath
2019). SEPs exist because of the active online participation of consumers. In other words, SEPs will cease to exist if nobody participates on them. Consumers’ participation on SEPs and the creation of successful SEPs can be major challenges.
From a theoretical viewpoint, consumers’ participation on SEPs is embedded in the social psychological stream of uses and gratifications theory (UGT) (Katz et al.
1973) and in our context seeks to explain the relationship between the online platform and active consumer participation. Theoretically, consumers’ participation can be explained by UGT (Raacke and Bonds-Raacke
2008). UGT is one of the most commonly adapted theories of media use and it facilitates the understanding of media use and its wide application (Dwyer et al.
2007). Internet users seek and explore various gratifications on media platforms resulting in finding reasons to continuously use and participate on such platforms (Limayem and Cheung
2011). UGT has a strong base in the media domain, and owing to its strong significance and theoretical foundation, it provides a strong basis in sharing economy contexts. For instance, the rise of SEPs has sparked the interest of researchers to better understand UGT applications in various contexts (Bucher et al.
2016).
In the context of social networking sites, users are generally devoted, engaged, participative and highly motivated to create user generated content and spending time on these platforms (Krause et al.
2014). In the same vein, taking into account the importance of consumer participation on SEPs, examining this from a specific UGT perspective is crucial. On SEPs consumers can actively participate and the term “active” is strongly linked with UGT which includes selecting content and actively interpreting it (Khan
2017). On the contrary, Livingstone (
2004) has argued that active online users can be self-directed, selective producers and consumers of the information at the same time. Some consumers present on an SEP might just be there for the sake of reading reviews, comments, posts from other consumers, or looking at photographs, thus consuming information only, rather than producing it. Consumers themselves might choose a passive role by not participating in discussions or contributing anything to the SEP.
Consumer’s participation on SEPs refers to an effort to achieve value co-creation through required but voluntary participation in service production and delivery processes on SEPs (Chae and Ko
2016; Kamboj et al.
2018). Previously, participation has also been referred to as ‘interaction’, i.e., the degree to which online members actively participate in the online platform’s activities. If consumer participation on an online platform is established, it provides an added assurance that the online platform will be successful and will remain a success (Koh and Kim
2004). UGT has been used comprehensively to underline the consumers’ motivation to participate on SEPs, yet less attention has been paid to how participation is comprised of various dimensions, especially on SEPs. Kamboj and Rahman (
2017) differentiate three types of participation: informational participation, actionable participation, and attitudinal participation.
Information participation is defined as “the degree to acquire information and fulfill general interests that a consumer possesses in the product or service”;
actionable participation refers to “the degree to which consumers participate in SEP activities frequently, and depicts the level of interaction between consumers on the SEPs”; and
attitudinal participation deals with “the psychological tendency to evaluate the performance of an SEP with a favorable or unfavorable assessment or some degree of positive or negative attitude towards the product or service, or platform in general” (Kamboj and Rahman
2017, p. 437).
Before testing whether these three forms of participation constitute consumers’ participation also on SEPs and how consumer participation relates to consumers’ ethical perceptions of SEPs, we will review the literature on value co-creation.
Value Co-creation on SEPs
In the sharing economy, the role of other consumers on SEPs becomes prominent when seeking advice and interactive discussions can lead to useful solutions/answers. This encourages consumers to participate more actively (Huang et al.
2013) and gives an opportunity for the SEP to enhance positive and repeated interactions, thus creating more value for the SEP. An illustrative example of value co-creation could be where on one side consumers are willing to pay a price for a convenient, economical, alternative for transportation, e.g., a taxi service. On the other side, there are service providers (drivers) who are willing to drive consumers and charge a fee for their services. Therefore, as the number of consumers increase, they will attract more service providers (drivers) to join the platform and vice versa. For instance, Uber creates a platform that facilitates consumers and service providers by creating an easy access platform and matching the demand and supply sides for transportation, thus creating value for everyone participating on the SEP (Sayar
2015). For companies to remain competitive and gain competitiveness, value co-creation has recently emerged as a major strength (Merz et al.
2018; Zwass
2010), and is thus the approach we adopt in our view.
According to service dominant (SD) logic (Vargo and Lusch
2004,
2008; Williams and Aitken
2011) companies are increasingly relying on consumers to co-create value and this understanding has led companies to utilize consumers and their experiences to create value as they design and develop products and services (Prahalad and Ramaswamy
2004). Prahalad and Ramaswamy (
2004) have termed value co-creation as a holistic management strategy which brings distinct agents together producing valued outcomes. Companies utilize a value co-creation approach frequently in order to gain a competitive advantage and build a strong corporate reputation and brand value (Cova and Dalli
2009). Value co-creation emphasizes the joint efforts by consumers, companies and other agents and means that mutual dependence and reciprocity are crucial for defining the interdependent roles associated with the production of value creation and service it provides (Vargo et al.
2008). Furthermore, SD-logic asserts that, services and not goods are the unit of exchange and the mutual actions of the consumer(s) and service provider(s) result in value co-creation. For efficient service delivery, consumers must learn to maintain, use, repair and adapt offerings to their usage situations, unique needs and behaviors (Vargo and Lusch
2004,
2008).
Value co-creation as a concept can also be viewed through the theoretical lens of new product development, which asserts giving a more active role to consumers, and companies are increasingly engaging consumers in the development of their services and products. As consumers are proactive on SEPs, they are able to participate in the design, testing, service conceptualization, product/service marketing and support specialization (Nambisan and Nambisan
2008; OHern and Rindfleisch
2010). In order to enhance value co-creation, companies also offer more tailored goods and services to consumers to encourage their participation (Bendapudi and Leone
2003; Firat and Venkatesh
1993). This, along with the essential role of consumer participation as described above, is a crucial basis for SEPs to exist.
Despite the substantial importance of SEPs, little consideration has been given to measuring consumers’ value co-creation intentions on such platforms in general, and in relation to the consumers’ ethical perceptions particularly. To address this shortcoming, we next introduce our research model.