Instant Messaging and Negotiation Outcomes in Peer-to-Peer Online Marketplaces: The Role of Institutional Trust.

Abstract

This study investigates the dynamics of buyer-seller interactions in peer-to-peer online marketplaces and their influence on perceived economic negotiation outcomes. It specifically examines how institutional trust mediates the relationship between negotiation outcomes and the use of instant messaging as a communication tool. Grounded in Media Synchronicity Theory and the institutional based trust framework, this research analyses data from a sample of 152 participants using structural equation modelling. The findings reveal that IM capabilities such as diverse symbol sets, transmission velocity, and rehearsability significantly enhance communication performance, while reprocessability and parallelism do not. Additionally, the study demonstrates that communication performance, represented by mutual understanding, positively affects perceived economic negotiation outcomes, with institutional trust playing a partial mediating role. A key implication of this research is identifying institutional trust as a critical mediator between communication media and perceived economic negotiation outcomes. This highlights the importance of integrating trust mechanisms when assessing the effectiveness of communication tools in online marketplace negotiations. This study distinguishes itself from existing research on communication media and negotiations by employing a comprehensive analytical approach that first evaluates the impact of IM's capabilities on mutual understanding and subsequently examines how this understanding relates to negotiation outcomes, mediated by a third factor, which is institutional trust.