Perceived risk and escrow adoption: An economic analysis in online consumer-to-consumer auction markets

Online escrow is an emerging trust service in consumer-to-consumer auction markets for protecting online traders from Internet fraud. Although the process of online escrow services (OES) ensures its effectiveness i blocking Internet frauds, its adoption rate is still surprisingly low relative to the increasing Internet fraud (Fraud.org 2001; Wolverton 2001). This paper intends to study the effect of traders perceived risk (Kahneman and Tversky 1979; Weber and Milliman 1999), defined as perceived risk rat