Blockchain Technology as a Means for Brand Trust Repair – Empirical Evidence from a Digital Transgression

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Blockchain Technology as a Means for Brand Trust Repair –
Empirical Evidence from a Digital Transgression
Martin Fleischmann
University of Southern California
mf_949@usc.edu
Bjoern S. Ivens
University of Bamberg
bjoern.ivens@uni-bamberg.de
Bhaskar Krishnamachari
University of Southern California
bkrishna@usc.edu
Abstract
Though much discussion in the realm of blockchain
revolves around the concept of trust, research
examining blockchain technology as a means for brand
trust repair is still at an initial stage. This study
conducts an experiment that analyzes blockchain
technology as a substantive response to a data breach
within a global business-to-consumer information
systems application. Thereby, the present study expands
trust repair theories to the context of blockchain and
branding. Research results indicate that the use of
blockchain technology as a reaction to a digital
transgression may be able to reinstate brand trust,
having a superior impact compared to an approach that
uses a centrally managed information systems platform
to restore brand trust. Overall, study results suggest that
the use of blockchain technology can be an effective
component of brand trust repair strategies in the digital
space.
1. Introduction
Trust is touted to be one of the main benefits offered
by blockchain technology [1] [2] [3], being identified as
a likely key driver for user adoption of blockchain
applications [4]. Though it may not yet fully live up to
its promises [5], blockchain technology is attributed the
potential to facilitate the generation of trust-free systems
in which the underlying technology itself serves as a
guarantee of trust [6] [7]. Therefore, blockchain
technology may offer brands and businesses the
possibility to enhance existing organizational
information systems (IS) with a new, fortified level of
trust [1].
Finding innovative, superior approaches to
improving the trustworthiness of organizations is
critical as numerous brands and companies are publicly
under fire for transgressions [8]. Scandals within
businesses can be witnessed worldwide, encompassing
many industries such as media, manufacturing, or
banking [9]. Many organizational transgressions occur
with regard to digital IS platforms and applications, e.g.
in the form of data breaches in which personal user data
is compromised and data privacy is violated [10]. IS
platforms and applications of global brands such as
Equifax, Facebook or Marriott have fallen victim to
attacks [11] [12] [13], resulting in the theft, exposure
and processing of sensitive personal data from
centralized storage systems without the consent of users
[10]. As a result, trust in the companies and
organizations managing the compromised platforms/
applications subsides [14]. Finally, digital platforms and
applications are likely to suffer user defection after an
organizational transgression such as a data breach
occurs [14].
As a response to a transgression in the digital space,
blockchain technology may be an auspicious solution to
effectively address prevailing vulnerabilities of existing
digital platforms/ applications. By adding an improved
level of trust [1], the use of blockchain technology in
afflicted IS platforms and applications may be a suitable
response to the looming negative effects of digital
scandals [15], potentially helping to reinstate trust in a
brand or business. To date, however, there is a dearth of
empirical evidence how users exposed to an
organizational transgression in the digital space
perceive the use of blockchain technology as a remedy.
Consequently, it is crucial to understand if the
implementation of a blockchain solution as a response
to a digital transgression may be able to help reestablish
trust in the affected brands, companies, organizations,
platforms and applications, which may finally help to
reduce the churn rate of users after a digital scandal.
Therefore, this research paper contributes to the
existing body of literature by investigating whether
blockchain technology is a means for brand trust repair,
and to what extent blockchain technology can assist in
reinstating brand trust of organizations, companies,
platforms and applications affected by a scandal in the
digital space. In this regard, the empirical investigation
is driven by the following two research questions:

1. Can the use of blockchain technology repair
brand trust that users have in a company/
organization/ platform/ application after a digital
transgression occurs?
2. Following a digital transgression, how does the
impact of a decentralized blockchain solution on
brand trust compare to the more common
approach that aims to reinstate trust via a
centrally managed IS platform?
To answer these research questions, this study uses
a critical incident that is based on a true, worldwide data
breach within a globally operating digital business-to-
consumer application. In a quantitative online
experiment among affected users, brand trust is used to
assess trust perceptions towards the afflicted
application. The employed analysis extends existing
theory around trust repair [8] [16] to the context of
blockchain technology and branding.
With these objectives and the applied methodology
in mind, the contribution of present research is
threefold: First, this research creates new insights at the
highly relevant intersection of blockchain technology
and trust, complementing extant literature with an
empirical research angle. Second, this study expands
trust repair theories to the context of blockchain
technology, analyzing the restoration of trust with
regard to a technology that itself posits to stand for a
system where trust concerns are non-existent. And third,
this research complements the yet limited body of
knowledge on trust repair in IS and marketing research
[8] [17], generating a novel perspective on brand trust
repair in the digital space.
2. Theoretical background
2.1. Trust and brand trust
Trust is a construct that has been studied from the
most diverse angles by many disciplines, such as
psychology, sociology, brand, and IS research.
Rousseau and colleagues synthesize common
understandings from these different fields. Taking their
cross discipline angle, trust can be defined as a
“psychological state comprising the intention to accept
vulnerability based upon positive expectations of the
intentions or behavior of another” [18]. Though, the
psychological state of trust may change over time and,
hence, is of dynamic nature [18]. Trust plays a key role
in interactions between two parties, serving as a
promoter of social exchange if present, but representing
a barrier within social interactions if absent [19]. In that
regard, a party does not necessarily need to be of human
nature, but can also represent e.g. an IS technology.
Overall, trust continues to constitute a
contemporary, highly relevant matter of research. Also
in the IS field, researchers have recognized the elevated
importance of trust and called for investigating the
concept of trust more in-depth [20] [21], especially
when it comes to novel, yet scarcely researched IS
contexts [22], such as blockchain technology. For
purposes of present research, we unite the trust
perspectives from extant IS literature that study trust-
based relationships between people and organizations as
well as between people and technology [21].
Trust at the brand level is attributed a high
importance for long-term business success as it plays a
critical role in establishing brand admiration, brand
loyalty behaviors, and brand advocacy behaviors [23].
In line with the formulated definition of trust and based
on the research of Delgado-Ballester and colleagues,
brand trust can be characterized as “the confident
expectations of the brand's reliability and intentions in
situations entailing risk to the consumer” [24]. In this
context, a brand represents a “value-generating entity
(name) relevant to both customers and the brand owner”
[23]. By being an entity, a brand may holistically stand
for various services and products offered by a company
as well as the organization behind it, especially if
products, services and brand carry the same name. As
brand trust is a decisive, long-term success factor for
businesses that captures the trust perceptions users may
have towards digital IS platforms and applications as
well as towards the companies and organizations
managing them in a holistic way, present research study
focusses on trust at the brand level.
2.2. Trust repair theories
Trust repair describes the enhancement of a trustor’s
trust following a transgression in which the trustee is
perceived as behaving in an untrustworthy manner [8]
[16] [25]. In order to restore trust, a trustee can apply
different trust repair strategies [8], whereby the nature
of the transgression has a strong influence on how trust
can be repaired [26]. Depending on industry and type of
transgression, some strategies proved to reinstate trust
better and in a different way than others [9] [16] [27].
Verbal response strategies, such as apology, denial,
promise, or explanation [8], represent non-substantive
responses that do not contain a tangible element and
may often be perceived as ‘cheap talk’ by trustors [16].
Of these verbal responses, apologies have been
investigated most frequently by extant literature, most
likely because it is the most commonly used strategy in
business practice [8] [10] [28].
Offering a more tangible response, substantive trust
repair strategies involve some kind of action or change
that is undertaken by the trustee [16]. Organizational

restructuring describes widely-used, substantive
responses in which changes are made to how an
organization operates. This can involve the introduction,
adjustment or elimination of structures, systems,
processes or policies within an organization [8]. With
the aim to guarantee that the trustee will behave in a
trustworthy manner in the future [16], the main goal of
organizational restructuring is to convey to the trustee
that preventive measures are put in place that preclude
another transgression in the future [16].
Another substantive response that can often be found
in business practice is penance, i.e. the voluntary offer
of some kind of financial compensation or remedy to the
trustor [9] [27]. Penance is used to send a signal of
repentance that pursues to provide a credible proof that
the trustee can be relied upon again in the future [16].
In summary, by employing one or various trust
repair strategies as a response to a transgression, trustees
are able to solve negative emotions a trustor may have,
create more transparency and thereby more
understanding of the transgression, generate assurance
for the future, and generally shift the feelings of trustors
into a more positive direction [8].
While the existing body of research around trust
repair is generally vast, there is still limited research in
some specific areas of IS and marketing literature. First,
research on trust violations and especially trust repair in
the IS field remains scarce [17]. In particular, a major
gap can be identified for the areas of digital data privacy
and data breaches [17]. The same is true for trust repair
research in marketing where particularly research
investigating the restoration of trust from the
user/consumer perspective is still at an initial stage –
hence, requiring more attention from scholars [8]. The
present study analyzes brand trust repair in the digital
space.
2.3. Blockchain technology and brand trust
repair
The blockchain concept, in its generic form,
describes a distributed ledger that is governed and
maintained autonomously in the digital space without
any central authority [29]. The term blockchain stands
for a distributed database that is shared within a peer-to-
peer network and comprises a sequence of
interconnected blocks. These blocks contain
cryptographically secured, immutable, and tamper-free
information around transactions that is verified within
the distributed network via a de-centralized consensus
mechanism [30].
The creation of trust is claimed to be one of the most
central benefits of blockchain technology [1] [2] [31].
Trust, moreover, is identified as one of the key drivers
for user acceptance of blockchain applications [4]. In
line with extant literature, user trust in blockchain
technology can be defined as the belief that lets users
“willingly rely and become vulnerable to businesses
offering blockchain applications after having assessed
the application’s characteristics” [4]. Blockchain
technology is attributed the ability to facilitate the
design and construction of trust-free systems in the
digital space [6]. In a trust-free setting, there is no need
for trust concerns with regard to another party as the
underlying blockchain technology securely guarantees
that everyone plays by the rules [3] [6]. Therefore,
blockchain technology is set to establish a new, yet
unattained level of trust within IS platforms [1].
Though promising to create superior levels of trust,
blockchain technology has yet to give proof of its trust
generating capabilities and overcome its prevailing
vulnerabilities [5]. Currently, some researchers still
advocate that trust concerns may continue to exist in
blockchain ecosystems [32]. In fact, there are several
limitations that prevent blockchain technology from
delivering on the trust promise [33], such as a lack of a
guarantee that the data stored on a blockchain is reliable
[34], the technological complexity that generates
feelings of insecurity and distrust on the user side [35],
or missing expertise with the blockchain topic [33]. Of
these barriers to trust, blockchain expertise appears to be
a critical aspect as a more profound knowledge of the
topic would also reduce perceived complexity and,
hence, ease distrust and insecurity with users.
Consequently, trust perceptions of blockchain
technology may likely get stronger among users as
expertise with the technology increases.
Despite the weaknesses that still surface with regard
to the concept of trust, yet nascent blockchain
technology, if further developed and matured, may be
able to strengthen the trust level of existing IS platforms
and applications in the future [1].
Summarizing and considering the findings from
extant research and theories, this research puts forward
the following hypotheses:
Hypothesis 1. The use of blockchain technology as
a substantive response to a data breach helps repair
brand trust that an affected user puts in an IS application
and the company managing it.
Hypothesis 2. Responding to a data breach with the
implementation of a decentralized blockchain solution
has a higher impact on brand trust repair than the more
common deployment of a centrally managed IS
solution.
Hypothesis 3. The level of expertise with the
blockchain technology concept has a positive influence
on the brand trust repair effect of a substantive response
to a data breach that uses blockchain technology.

3. Research methodology
To answer the formulated research questions via a
theory testing, deductive analysis approach, the present
study conducts an experiment that is facilitated via a
quantitative online survey [36] [37].
3.1. Sample and data collection
Data was collected via an online survey among
college students at a major research university in the
United States. A student sample was selected for three
main reasons:
First, college students are the part of the population
that most actively uses the internet and digital
applications [17]. Hence, the employed student sample
promises to yield a high overlap with the examined IS
application’s user base, especially when considering the
age profile published for the users of the IS platform that
is analyzed in this study. This makes students a relevant
and important segment for the studied IS application and
this research [38].
Second, college students have an advanced
education and represent a demographic group that
adopts technological innovations, such as smartphones
or tablet PCs, earlier than other subgroups of the
population [39]. This is also true for the adoption of
cryptocurrencies as people with a high education, such
as college students, are more likely to be cryptocurrency
owners than individuals with a low education [40].
Consequently, a student sample is convenient to
examine the formulated research questions and
hypotheses of this study, especially when it comes to
analyzing the role of blockchain expertise in the trust
repair process (see hypothesis 3). As the student sample
is likely to include a comparably high early adopter
share of already available blockchain applications, such
as cryptocurrencies, the blockchain expertise among
students is also expected to be more advanced than in
other demographic subgroups.
Third, the use of a student sample is well-suited for
present study due to its homogeneity [38] which offers
important advantages for the employed theory testing
research strategy [41]. The sample comprises a set of
homogenous individuals who promise to carry a
combination of the most relevant characteristics
relevant for this study, i.e. they most likely use the
analyzed IS platform and may have at least some
expertise with the blockchain topic. Thus, college
students provide an ideal environment for a rigorous test
of trust repair theories in the context of blockchain
technology [41], facilitating theory application that
involves all relevant aspects and excludes any
extraneous factors that may potentially decrease validity
of results. Hence, the homogenous sample adds rigor to
the analysis and enhances the statistical validity of
conclusions [41].
Students were invited to participate in the study via
email or in-class learning management systems. The
invitation included a link to the online survey that
contained the experiment involving the critical incident.
A short screener made sure that only currently enrolled
students who were users of the affected, digital
business-to-consumer application were allowed to
participate in the study. The online survey (median
length: 22 min) was conducted in April 2019 using the
data collection software Qualtrics. The obtained sample
included n=121 participating students. Table 1
visualizes the main demographic characteristics of the
sample. Student respondents have a median age of 23
years. 60.3% are citizens of the United States. The
sample, moreover, is characterized by an almost equal
gender split. 41.3% of the respondents pursue
undergraduate studies, 58.7% study at the graduate
level.
Table 1. Demographic sample profile
n
%
Gender
Female
58
47.9%
Male
63
52.1%
Other
0
0.0%
Age
23 years old or younger
68
56.2%
24 years old or older
53
43.8%
Nationality
United States
73
60.3%
Other
48
39.7%
Level of studies
Undergraduate
50
41.3%
Graduate
71
58.7%
3.2. Experimental setup
This study carries out an experiment that involves a
true data breach within a well-known digital business-
to-consumer application that operates on a global scale.
More specifically, the critical incident comprises a
transgression in which the IS application fell victim to a
hacker attack and had sensitive personal user data
illicitly harvested and commercialized without the
consent of users. In this particular context, the affected
application and the company managing it both carry the
same name.
A true, real-world data breach was purposely
selected for the present study with the goal to generate
findings that are closely tied to empirical reality.

Figure 1. Three-step experimental process
Being close to business practice was deemed as more
important for this study than assessing brand trust
perceptions prior to the transgression, which would have
required to design a purely fictional experiment. The use
of an experiment, for purposes of this study, is
commensurate with extant empirical trust repair
research strategies [16] [17] [25].
In order to assess brand trust repair among users, the
experiment was designed as a three-step process,
visualized in figure 1: In step 1, participants were
presented with a summary of the true data breach,
followed by the first brand trust assessment: the post-
incident measurement (PIM). Afterwards, step 2 and
step 3 presented respondents with two different,
fictional trust repair responses to the data breach, again
complemented by a brand trust evaluation for each
response: the post-reaction measurements. With the aim
to avoid any response bias, the order of the two trust
repair strategies was rotated in a way that each repair
strategy was rated before the other by approximately
half of the respondents.
The first trust repair response described a fictional
trust repair strategy of the company managing the
compromised IS application. This response was
developed based on actual actions to a data breach that
were taken in the past by other companies within the
same industry.
In this reaction, the company first offered a non-
substantive response in form of an apology and a
promise [8] [10] [16], followed by a substantive
response that outlined an organizational restructuring
[8] [16]. The organizational restructuring proposed the
introduction of an enhanced, centrally managed storage
system for sensitive personal data within the company.
This storage system would be kept within and
administered by the company. Additionally, the
company promised to enable users to control their data
privacy configurations within the new system,
facilitating an easy, transparent access to personal
privacy settings. For purposes of this study, the brand
trust assessment with regard to the first response is
labeled as the post-reaction measurement based on
actual actions (PRM-A).
Opposed to the response that is based on actual
actions taken within the industry in similar data
breaches, the second fictional trust repair strategy
involved the use of blockchain technology. In this
reaction, the non-substantive repair efforts were the
same as in the response that is based on actual actions,
hence including the same apology and promise.
With regard to the substantive repair strategy that
involved organizational restructuring, major changes
were implemented compared to the first response:
instead of a centrally managed storage system within the
company (central, internal data base), the second
response introduced a decentralized blockchain system
for storing sensitive personal data with users of the
application (decentralized, distributed data base).
Opposed to being maintained by the company
(administration by the company), the underlying
blockchain technology would automatically manage the
data base in the second case (automatic administration
by blockchain technology). And, instead of the company
granting access to data privacy control settings (data
privacy control provided by the company), the response
using blockchain technology would allow users to
decide collectively on the data privacy control
configurations of the system, i.e. on how the application
was able to use and share sensitive personal data (data
privacy control determined by the user base).
With these characteristics, the substantive response
in the second repair scenario encompasses some of the
central benefits that extant literature attributes to
blockchain technology: decentralization, automation,
participation, and control [4] [30]. In this research study,
the brand trust assessment with regard to the second
response is described as the post-reaction measurement
based on the use of blockchain (PRM-B).

Figure 2 provides a compact comparison of the
different substantive responses used in the two brand
trust repair strategies that are finally evaluated in
PRM-A as well as PRM-B.
Figure 2. Trust repair strategies and
their substantive responses
3.3. Measures
This study measured brand trust using the scale
developed by Delgado-Ballester and colleagues [24]
[42]. All brand trust items were assessed on a 7-point
scale that ranged from 1 “very strongly disagree” to 7
“very strongly agree”. The scale measuring blockchain
expertise of respondents was derived from the work of
Mishra and colleagues [43] and the work of Sichtmann
and Diamantopoulos [44]. The items were measured on
7-point scales ranging from 1 “uninformed” to 7
“informed, 1 “know very little” to 7 “know very much”,
and 1 “unfamiliar” to 7 “familiar”, depending on the
item. Table 2 gives an overview of the employed items
to measure brand trust and blockchain expertise.
Table 2. Items to measure brand trust and
blockchain expertise
Brand trust
BT1: This brand meets my expectations
BT2: I feel confidence in this brand
BT3: This brand never disappoints me
BT4: This brand guarantees satisfaction
BT5: This brand would be honest and sincere in addressing my
concerns
BT6: I could rely on this brand to solve any problem I have with
the platform
BT7: This brand would make any effort to satisfy me
Blockchain expertise
BE1: How knowledgeable do you feel about blockchain?
BE2: How informed do you feel about blockchain?
BE3: How familiar are you with blockchain?
4. Analysis and results
In order to comprehensively test the formulated
hypotheses, analyses were performed using the
statistical analysis software SPSS (v.24). With regard to
assessing whether and to what extent brand trust levels
were different between PIM, PRM-A and PRM-B, a set
of group comparing analyses [45], namely paired-
samples t tests and Wilcoxon signed-rank tests, was
performed.
The results of the paired-samples t-test show that
brand trust improves significantly for PRM-B compared
to PIM (MEANPRM-B = 3.556; MEANPIM = 3.069; t =
5.298; p < 0.001), while for PRM-A no significant
change in brand trust can be observed in comparison to
PIM (MEANPRM-A = 3.143; MEANPIM = 3.069; t =
1.235; p > 0.05). The same is true for the Wilcoxon
signed-rank tests: brand trust enhances for PRM-B in
comparison to PIM (MEDIANPRM-B = 3.571;
MEDIANPIM = 3.000; Z = -5.146; p < 0.001), but not for
PRM-A compared to PIM (MEDIANPRM-A = 3.000;
MEDIANPIM = 3.000; Z = -1.028; p > 0.05). When
comparing the brand trust levels attained after
implementing the trust repair responses, PRM-B
outperforms PRM-A, reaching a significantly higher
brand trust level. This is evidenced by the results of the
paired-samples t-test (MEANPRM-B = 3.556; MEANPRM-
A = 3.143; t = 5.078; p < 0.001) as well as the Wilcoxon
signed-rank test (MEDIANPRM-B = 3.571; MEDIANPRM-
A = 3.000; Z = -4.687; p < 0.001). In summary, the
results of the paired-samples t tests and Wilcoxon
signed-rank tests, visualized in table 3, support both
hypotheses 1 and 2.
Table 3. Results of paired-samples t tests and
Wilcoxon signed-rank tests
Paired-samples t tests
MEAN
PRM-B
=3.556
MEAN
PIM
=3.069
t = 5.298
p < 0.001
MEAN
PRM-A
=3.143
MEAN
PIM
=3.069
t = 1.235
p > 0.05
MEAN
PRM-B
=3.556
MEAN
PRM-A
=3.143
t = 5.078
p < 0.001
Wilcoxon signed-rank tests
MEDIAN
PRM-B
=3.571
MEDIAN
PIM
=3.000
Z = -5.146
p < 0.001
MEDIAN
PRM-A
=3.000
MEDIAN
PIM
=3.000
Z = -1.028
p > 0.05
MEDIAN
PRM-B
=3.571
MEDIAN
PRM-A
=3.000
Z = -4.687
p < 0.001

In order to analyze whether the level of blockchain
expertise has an influence on the trust repair effect of a
substantive response, this study undertook a series of
independent samples t tests [45]. For the analyses, the
post-incident brand trust measurement (PIM), the brand
trust assessment of the repair strategy involving the use
of blockchain technology (PRM-B) as well as the
difference in brand trust between PRM-B and PIM
(DELTA) were designated as being the independent
variables, the level of blockchain expertise served as the
dependent variable.
For purposes of the independent samples t test,
respondents with some level of blockchain expertise
(ratings ≥ 2) were contrasted to participants with no
expertise around blockchain technology (ratings < 2).
Results of the performed analyses, visualized in table 4,
show no significant differences in brand trust between
the two groups for PRM-B (MEANPRM-B/some expertise =
3.738; MEANPRM-B/no expertise = 3.331; t = 1.778; p >
0.05), for PIM (MEANPIM/some expertise = 3.107;
MEANPIM/no expertise = 3.021; t = 0.384; p > 0.05), as well
as for DELTA (MEANDELTA/some expertise = 0.631;
MEANDELTA/no expertise = 0.310; t = 1.752; p > 0.05). Thus,
the results obtained in the independent samples t tests do
not support hypothesis 3.
Table 4. Results of independent samples t tests
Independent samples t tests
Some expertise
No expertise
MEAN
PRM-B
=3.738
MEAN
PRM-B
=3.331
t = 1.778
p > 0.05
MEAN
PIM
=3.107
MEAN
PIM
=3.021
t = 0.384
p > 0.05
MEAN
DELTA
=0.631
MEAN
DELTA
=0.310
t = 1.752
p > 0.05
5. Discussion
Blockchain is a yet nascent, emerging technology
that strives to add a new level of trust to IS applications
and platforms. More specifically, blockchain
technology may yield the potential to facilitate the
generation of trust-free systems in which the underlying
technology itself serves as a guarantee of trust to users.
Therefore, the use of blockchain technology may also
improve trust perceptions that users have towards
brands, organizations and businesses. With this, the use
of blockchain technology as a substantive response to a
transgression in the digital space may offer brands and
businesses the possibility to effectively address
prevailing vulnerabilities of existing digital platforms
and applications. This may finally help to repair trust
after an occurred scandal and reduce churn among users.
Therefore, the present study investigates whether and to
what extent blockchain technology can be a means for
brand trust repair, conducting an online experiment
among affected users of a real-world business-to-
consumer IS application struck by a true, major data
breach.
The results of this research study provide clear
answers to the formulated research questions.
1. Can the use of blockchain technology repair
brand trust that users have in a company/
organization/ platform/ application after a digital
transgression occurs? The obtained results indicate
that blockchain technology as a substantive response to
a data breach may be able to repair brand trust that an
affected user puts in an IS application and the company
managing it. These findings support hypothesis 1.
2. Following a digital transgression, how does the
impact of a decentralized blockchain solution on
brand trust compare to the more common approach
that aims to reinstate trust via a centrally managed
IS platform? The study results provide evidence that
the implementation of a decentralized blockchain
solution as a response to a data breach outperforms a
response that is more commonly used in business
practice and involves the deployment of a centrally
managed IS solution. These findings provide support for
hypothesis 2.
As the substantive, blockchain-based response
focusses on the benefits of decentralization, automation,
participation, and control [4] [30], the obtained results
suggest that those aspects may in fact be enticing and
important benefits to users and consumers. Hence,
focusing on these four aspects when developing and
designing a blockchain-based data privacy application
may help practitioners to establish trust with users and
may finally help to promote the application’s
technology acceptance among them.
Additionally, results suggest that the most
commonly used substantive response to a data breach,
i.e. the introduction of an enhanced, centrally managed
storage system that is administered by the affected
company and provides users data privacy control
(granted by the company), has only limited impact on
the restoration of trust. This outcome supports the
assumption that it is crucial to find innovative, superior
approaches to improving the trustworthiness of
organizations that are hit by a transgression.
Another finding of this study is that the level of
expertise that users have with the blockchain technology
concept does not seem to influence the brand trust repair
effect of a blockchain-based, substantive response to a
data breach. Hence, the study findings do not support
hypothesis 3. This result may be explained by the fact
that blockchain is still a relatively new, yet nascent
technology [1] that is far from being mainstreamed.
With this, the general level of knowledge about
blockchain technology is still relatively low. This is also
true for this research study: the mean level of blockchain

expertise reaches a relatively low score of 2.52, the
median level a score of 2.00 (on a 7-point scale where 1
stands for “no expertise” and 7 stands for “very high
expertise”). As a result, this study found no support for
hypothesis 3 by contrasting trust perceptions of
respondents with some level of blockchain expertise
(ratings ≥ 2) to participants with no expertise around
blockchain technology (ratings < 2). Once blockchain
technology matures and blockchain-based applications
are used in a more widespread manner, the general level
of expertise with the blockchain topic may become
stronger. With this, differences in the respondents’
levels of expertise may become more pronounced and
noticeable. Thereby, the greater differentiation may
facilitate a more granular and refined analysis of the
relationship between blockchain expertise and the trust
repair effect a substantive, blockchain-based response to
a data breach. Therefore, blockchain expertise may
unveil as a promoter of brand trust in the future as
knowledge of and familiarity with the blockchain topic
increase, resulting in more pronounced differences
when it comes to the level of expertise with the
blockchain topic.
6. Limitations and future research
While present research complements and enriches
extant literature, it certainly is not without limitations.
These identified limitations can serve scholars as fruitful
avenues for future research:
First, this study performs an online experiment and
investigates brand trust repair based on a true data
breach within a global business-to-consumer IS
application. With this, the research stays close to
business practice and mirrors real-world reactions of
businesses and users. Contrary to that, using a purely
fictional transgression may offer some opportunities for
future research. On one hand, a purely fictional scandal
facilitates the pre-incident measurement of brand trust,
serving as an additional point of comparison to unveil
shifts in brand trust from before the incident all the way
until the implementation of the brand trust repair
strategy. The additional pre-incident measurement
could lead to an even more comprehensive
understanding of the use of blockchain technology as a
response to a transgression in the digital space and its
implications for brand trust.
On the other hand, a fictional transgression allows
researchers to induce manipulations and reactions in an
isolated way, facilitating the investigation of single
aspects that a blockchain technology solution may offer
to a brand trust repair strategy, such as control over
personal data following a data breach. Despite being
further away from business practice, an isolated view,
as successfully performed in organizational literature
[16] [28], could more specifically assess the role of
different blockchain characteristics in the brand trust
repair process. This could promote an even better
understanding of the importance that aspects of
blockchain technology, such as decentralization,
automation, participation, and control have, when
designing a substantive response to a data breach.
A second limitation of this research is the sample. Of
course, the student sample offers important advantages
for purposes of this study, such as the provision of a
relatively homogenous sample that is deemed as being
ideal for a deductive, theory testing research strategy.
That said, the sample comprises a highly relevant user
group for the examined IS application and yields all
important characteristics needed to expand trust repair
theories to the context of this study and to test the
formulated hypotheses. With this, the choice of the
sample adds rigor to the analyses and increases validity
of results [41]. Nonetheless, opening up the research to
a target group that better represents the demographics of
the population may help to generate more generalizable
insights. The findings outlined in this paper provide an
ideal foundation to replicate the research study among a
broader audience and, thereby, to create an even closer
connection between the research setup and empirical
reality.
Third, this study measures expertise with the
blockchain topic based on how knowledgeable, familiar,
and informed respondents feel to be with the topic. By
complementing this measurement with contentual
aspects such as personal experiences and perceptions or
know-how with regard to specific use cases such as
cryptocurrencies, the construct of blockchain expertise
would get richer.
A richer, more differentiated conceptualization of
blockchain expertise could offer the opportunity for an
even deeper understanding of relationships between
expertise and brand trust repair. Especially as
blockchain applications and the use of blockchain
technology in IS platforms are still nascent and far from
being mainstreamed, infusing additional information on
the blockchain expertise and experience of users may
add value to future empirical research by allowing to
induce more demographic and psychographic
respondent data into the analytic process.
7. Conclusion
This research paper adds new empirical insights to
the existing body of literature at the intersection of
blockchain technology, trust, and branding. More
specifically, the present study expands trust repair
theories to the contexts of blockchain technology,

digital IS applications and branding – three areas in
which research on this topic is yet scarce. The research
study generates evidence that the deployment of
blockchain technology in a substantial response to a
digital transgression has the potential to restore brand
trust that users put into an IS application and the
organization managing it. Therefore, present research
advocates that the use of blockchain technology appears
to be an effective means of brand trust repair in the
digital space.
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