Trust and Swindling on the Internet

Abstract

Fraud on the Internet is developing into a major issue of concern for consumers and businesses. Media outlets report that online fraud represents “an epidemic of huge and rapidly growing proportions”. One area that is particularly of interest is the area of swindling activities related to online auctions. Understanding fraud is especially important because of the “network externality” effect, in which a large number of satisfied users attracts other users to use the commercial services offered through the Internet, this effect is based on the knowledge that satisfied traders induce others to trade on the Internet increasing the trading system efficiency. Headlines that present swindling activities on the internet deter users from using the internet for commercial activities.