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Despite being widely used in practice and often asserted to be an effective trust-building mechanism, little empirical evidence exists regarding the effect of identity verification on sharing economy platforms. We theoretically develop a model based on signaling theory to explain how identity verification strengthens users’ intention to engage in sharing economy transactions by increasing the level of trust towards a verified transaction partner. To test our hypotheses, we design a between-subject online experiment comparing subjects’ perceptions of identity-verified and non-verified user profiles on an accommodation sharing platform. Data was collected from 232 participants and analyzed using covariance-based structural equation modeling. We found identity verification to significantly increase transaction intention, while its effect was mediated by trust in the transaction partner. Moreover, trust disposition was found to be a significant antecedent of users’ transaction intentions. We discuss our findings and provide implications for theory and practice.
Sharing Economy, Identity Verification, Trust, Signaling Theory