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«Trust in Electronic Commerce - a Language Action Perspective Hans Weigand, Willem-Jan van den Heuvel Infolab, Tilburg University P.O.Box 90153, 5000 ...»

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Trust in Electronic Commerce - a Language Action


Hans Weigand, Willem-Jan van den Heuvel

Infolab, Tilburg University

P.O.Box 90153, 5000 LE Tilburg

The Netherlands

email: wjheuvel@kub.nl weigand@kub.nl

November 27, 1998


It is generally recognized that "trust" is an essential feature in business and even

more critically so in electronic commerce. In this paper we rst put "trust" and related terms like deception and fraud in context using a language action perspective of electronic commerce. We use the theory of Habermas to distinguish between communicative action and strategic action. In the second part of the paper, we describe various ways in which fraud prevention and trust building can be implemented by means of a mediating and monitoring broker. The central claim of the paper is that security is not an add-on but part-and-parcel of "good" communication.

1 Introduction From the start of the Internet, in the begin of the seventies, scientists have used this medium to sustain research communities. Only in reent years, since commercial clients have been allowed, this network, also called the Internet, has become available to the big public.

Whereas in the beginning, the network was used by the research community universities, institutions, etc. that did mainly consist of a small group of people, these days the burgeons of Cyberspace reside anonymously in di erent types of communities at the same time Spar and Bussgang, 1996. For instance a burgeon of Cyberspace can at one moment order something at an electronic bookstore, and thereafter get some information about ORB's at the OMG-website.

Trust plays an important role in everyday social interaction between subjects, and more particularly electronic commerce transactions. For instance, if a customer orders a book at a bookstore on the WWW, the supplier will, in case of any mistrust, hesitate whether he shall actually send the book to the customer. Conversely, the customer may be reluctant to send credit card information over the Internet. A situation may occur in which no commercial transactions get a chance. And even when transactions do get a chance, the transaction costs may rise because of the extra security measures that have to be taken Williamson, 1985.

In this paper, we propose a broker architecture that enhances trustworthy transactions. We take the Language Action perspective as our paradigm. The Language Actionperspective focuses on the actions people perform while communicating. The foundation of this perspective is laid by Austin Austin, 1962 and Searle Searle, 1969, who claim that actions are performed on the basisof speech acts, e.g. language acts that form the most elementary unit of communication between subjects.

The remainder of this paper is organized as follows. In section 2 we present the basic concepts of communicative action in order to build up a conceptual framework in which "trust" can be de ned. Thereafter, we show the consequences of this framework for the security of electronic commerce communication. In section 4 we apply the conceptual framework by describing a broker architecture for trustworthy electronic commerce transactions and nish with a conclusion.

2 Putting trust in context The concept of trust has been studied in a variety of situations and scienti c disciplines.

Kini and Choobineh, 1998 provide a broad overview of the notion of "trust" in which they distinguish three perspectives: 1 the approach of Personality Theorists - that focuses on the tendency to trust of an individual, 2 the approach of sociologists - that focuses on societal trust, trust that people have in social institutions, and 3 the approach of social psychologists - that focuses on the role of trust in relationships. To these perspectives, we could add an economic approach that analyzes the dynamics of trust using game-theory Nooteboom, 1996 or transaction cost economics Williamson, 1985. In this paper, we want to take a communicative, or Language Action approach, since communicative acts, be it in the form of documents or EDI messages, or otherwise, are at the core of Electronic Commerce transactions.

Models that are based on the L A-perspective focus on the communicational structure of a transaction, viewed as a communicative action. A communicative action can be de ned as `an interaction between subjects that engage in a social relationship' Habermas, 1984. We will develop the perspective by further elaborating on some of the core concepts associated with communicative actions: sign, world, community.

2.1 Signs and deception A communicative action is de ned as an interaction between subjects, where this interaction is linguistic: people perform illocutionary acts, with a certain e ect in the social world, by means of utterance acts, that is, using signs and combinations of signs. For example, by uttering the word "John" utterance act a Speaker can refer illocutionary act to a John.

The relationship between the utterance act and illocutionary act is not a causal one but is based on social conventions. As such, it is always possible to misuse it: to shout "fox!" when there is no fox around. It is exactly by means of signs that subjects can deceive.

Umberto Eco expresses the same in his slogan: "In principle, semiotics is the discipline studying whatever can be used for lying". Note, however, that the possibility to misuse the sign is parasitic on the normal use of the convention. As such, deception does not challenge the Gricean principles "be relevant", "be cooperative", etc but actually reinforces them.

If subjects would not be cooperative most of the time, and use the sign according to the convention, the status of the convention would pass away and there would be no chance for deception either.

Some may question the close connection between signs and deception by arguing that one can also deceive another agent by just leaving the other in his ignorance or false beliefs.

However, in general one would not speak about deception in such a case. For example, although I do not inform the people in China daily about my work progress, and hence leave them ignorant, it is hard to call this a case of deception. The issue here is one of relevance.

When another agent yells in the dark: "Is anybody there?" and I keep silent, the silence is indeed a form of deception, because as a communicative agent, I am expected to make myself known, and I know the other party will interpret silence as a sign of no one being there. So although the meaning of signs should always be considered in context see also below, we maintain that it is not possible to arrive at a meaningful notion of "deception" if it does not involve communicative action.

2.2 World The L A-perspective assumes that the actions that are performed by the subjects, take place in a world or context. This context is both presumed by the communicative actions and created by it.

In Winograd and Flores, 1986, Winograd and Flores state that ` K nowledge and understanding... arise from the individual's committed participation in mutually oriented patterns of behavior that are embedded in a socially shared background of concerns, actions, and beliefs.... Through language... we create and give meaning to the world we live in and share with others'.

In other words, Winograd and Flores claim that we ourselves build up the conception of world we live in by means of language.

Habermas introduces a more re ned de nition of a world; he states that through the `communicative practice, they the subjects assure themselves at the same time of their common life-relations, of an intersubjective shared lifeworld'.

As we have said above, the successful use of signs is dependent on the existence of social conventions. These conventions do not exist out there in an objective way: they must be supported by a community of subjects. However, these communication conventions are not the only part of the lifeworld; this world includes also the shared concepts, beliefs, norms etc that are needed for the right interpretation of the speech acts. It must be clear that communication cannot be understood solely by studying the signs messages in isolation, but should always be considered in context. Linguists have expressed this by saying that a message is more a kind of  that should be combined with the shared context to derive the intended meaning Clark, 1996Dik, 1989.

Thinking a bit further, it becomes clear that subjects do not live in one `world', but in many worlds at the same time. We de ned a world or domain as a `world that is made up by the language actions we perform and de nes the scope of the commitments and the obligations that are made' van den Heuvel and Weigand, 1997. For example, norms di er from the organization I work in and the home I share with others; consequently, the speech acts that I perform only make sense within the boundaries of the particular domain, e.g. the organization. These world can be `natural' worlds, like countries and families or `arti cial worlds', like the world that we create when playing a game, setting up an organization or making a transaction on the Internet.

According to Habermas Habermas, 1984 rationalization as a historical process encompasses di erentiation of the "world" in three aspects: the subject world, the object world and the intersubject world. The subject world is the world of the beliefs, concerns and wishes of one individual subject. The intersubject or social world supports the interaction between multiple subjects and contains norms, obligations and social knowledge. The object world is the world of objects and cause-event relations. For one thing, this di erentiation reminds us that communication should not be reduced to one single dimension: for example, a logical reduction to truth conditions, or a psychological reduction to "intentions".

2.3 Community Communities are recognized as an important ingredient in developing lasting and fertile electronic commercial relationships. A community can be de ned as Webster Dictionary:

people living in the same district, city, etc. under the same laws;

the district, city etc. where they live;

a group of people living together and having interests, work, in common: as a college community.

society, public;

ownership or participation in common;

similarity; likeness: as, a community of spirit.

So, a community is characterized by a common background, or community of spirit, the same laws, interests and living areas. In L A terms, it is identical to the subjects sharing a life-world. Because of the fact that the domains we are talking about in EC are arti cial domains, we cannot identify physical borders of a community or domain, like a country border. Sometimes other means can be taken to demarcate the community, such as a domain administrator see section 3.

Besides physical communities, towards which the Webster Dictionary is oriented, we can discern arti cial communities, for instance electronic communities in something that is called Cyberspace. In Armstrong and Hagel, 1996, Armstrong and Hagel identify four kinds of

electronic communities that meet consumer needs:

1. Communities of transaction These communities support the actual negotiation between buyers and sellers, and o er related services like information about the product. An example of such a community is an electronic bookstore.

2. Communities of interest These communities bring together subjects with the same interests. An example is the Object Management Group.

3. Communities of fantasy An example of such an environment is the MUD-environment, where participants can pretend they are a certain hero, and build whole virtual, fantasy settings and story lines.

4. Communities of relationships These communities contain people that not only have tight relationships with each other. Mostly, these relationships are based on a shared background, for instance the members all had the same decease. An example of such a site is the Anonymous Alcoholics Site.

Communities are developed and supported by communication, but this kind of communication is quite di erent from business transactions. The latter are by de nition oriented at some action, the delivery of a product or a payment etc. Communication to support community building is not oriented at some particular action, but at sharing beliefs, values and norms. In this way, the stock of shared knowledge can grow and a basis is laid for communicative action as de ned in the next subsection.

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