Academic journal article Journal of the Association for Information Systems

Concern for Information Privacy and Online Consumer Purchasing1

Academic journal article Journal of the Association for Information Systems

Concern for Information Privacy and Online Consumer Purchasing1

Article excerpt

Abstract

Although electronic commerce experts often cite privacy concerns as barriers to consumer electronic commerce, there is a lack of understanding about how these privacy concerns impact consumers' willingness to conduct transactions online. Therefore, the goal of this study is to extend previous models of e-commerce adoption by specifically assessing the impact that consumers' concerns for information privacy (CFIP) have on their willingness to engage in online transactions. To investigate this, we conducted surveys focusing on consumers' willingness to transact with a well-known and less well-known Web merchant. Results of the study indicate that concern for information privacy affects risk perceptions, trust, and willingness to transact for a wellknown merchant, but not for a less well-known merchant. In addition, the results indicate that merchant familiarity does not moderate the relationship between CFIP and risk perceptions or CFIP and trust. Implications for researchers and practitioners are discussed.

Introduction

Although information privacy concerns have long been cited as barriers to consumer adoption of business-to-consumer (B2C) e-commerce (Hoffman et al., 1999, Sullivan, 2005), the results of studies focusing on privacy concerns have been equivocal. Some studies find that mechanisms intended to communicate information about privacy protection such as privacy seals and policies increase intentions to engage in online transactions (Miyazaki and Krishnamurthy, 2002). In contrast, others find that these mechanisms have no effect on consumer willingness to engage in online transactions (Kimery and McCord, 2002). Understanding how consumers' concerns for information privacy (CFIP), or their concerns about how organizations use and protect personal information (Smith et al., 1996), impact consumers' willingness to engage in online transactions is important to our knowledge of consumer-oriented e-commerce. For example, if CFIP has a strong direct impact on willingness to engage in online transactions, both researchers and practitioners may want to direct efforts at understanding how to allay some of these concerns. In contrast, if CFIP only impacts willingness to transact through other factors, then efforts may be directed at influencing these factors through both CFIP as well as through their additional antecedents.

Prior research on B2C e-commerce examining consumer willingness to transact has focused primarily on the role of trust and trustworthiness either using trust theory or using acceptance, and adoption-based theories as frameworks from which to study trust. The research based on trust theories tends to focus on the structure of trust or on antecedents to trust (Bhattacherjee, 2002; Gefen, 2000; Jarvenpaa et al., 2000; McKnight et al., 2002a). Adoption- and acceptance-based research includes studies using the Technology Acceptance Model (Gefen et al., 2003) and diffusion theory (Van Slyke et al., 2004) to examine the effects of trust within well-established models. To our knowledge, studies of the effects of trust in the context of e-commerce transactions have not included CFIP as an antecedent in their models. The current research addresses this by examining the effect of CFIP on willingness to transact within a nomological network of additional antecedents (i.e., trust and risk) that we expect will be influenced by CFIP.

In addition, familiarity with the Web merchant may moderate the relationship between CFIP and both trust and risk perceptions. As an individual becomes more familiar with the Web merchant and how it collects and protects personal information, perceptions may be driven more by knowledge of the merchant than by information concerns. This differential relationship between factors for more familiar (e.g. experienced) and less familiar merchants is similar to findings of previous research on user acceptance for potential and repeat users of technology (Karahanna et al. …

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