Content area
Full Text
While privacy is a highly cherished value, few would argue with the notion that absolute privacy is unattainable. Individuals make choices in which they surrender a certain degree of privacy in exchange for outcomes that are perceived to be worth the risk of information disclosure. This research attempts to better understand the delicate balance between privacy risk beliefs and confidence and enticement beliefs that influence the intention to provide personal information necessary to conduct transactions on the Internet. A theoretical model that incorporated contrary factors representing elements of a privacy calculus was tested using data gathered from 369 respondents. Structural equations modeling (SEM) using LISREL validated the instrument and the proposed model. The results suggest that although Internet privacy concerns inhibit e-commerce transactions, the cumulative influence of Internet trust and personal Internet interest are important factors that can outweigh privacy risk perceptions in the decision to disclose personal information when an individual uses the Internet. These findings provide empirical support for an extended privacy calculus model.
Key words: privacy calculus; trust; risk; e-commerce; LISREL
History: Cynthia Beath, Senior Editor; Laurie Kirsch, Associate Editor. This paper was received on August 18, 2003, and was with the authors 15½ months for 4 revisions.
Introduction
The fact that privacy is a widely coveted and highly privileged value in American society reflects the importance of individualism in the country's philosophical foundations (Etzioni 1999). In recent years, the explosive growth of Internet use to obtain information, goods, and services has fueled debate and controversy about potential threats to privacy. While contemporary information systems provide clear efficiencies that allow firms to gather, process, and store consumer data, providing important marketingrelated competitive opportunities, they also introduce risks for individuals who disclose personal information to retailers. Most polls reveal that consumers strongly value privacy (Westin 2001, UCLA 2000-2004). Yet, while privacy concerns are reported to be a major factor inhibiting e-commerce, sales over the Internet continue to increase. Economists and practitioners who refer to this paradox argue that consumers' actual behaviors may be different from their revealed privacy preferences. Either their behavior reflects lower privacy concerns than polls and research would suggest (Ackerman et al. 1999, Sweat 2000), or other factors mitigate privacy concerns.
The objective of our research is to...
