Perceived Information Security, Financial Liability and Consumer Trust in Electronic Commerce Transactions

Logistics Information Management, Volume 15 . Number 5/6 . 2002 . pp. 358-368

11 Pages Posted: 19 Jan 2014

See all articles by Ramnath K. Chellappa

Ramnath K. Chellappa

Emory University - Goizueta Business School

Paul A. Pavlou

Temple University - Department of Management Information Systems; Temple University - Department of Strategic Management

Date Written: 2002

Abstract

Electronic commerce (EC) transactions are subject to multiple information security threats. Proposes that consumer trust in EC transactions is influenced by perceived information security and distinguishes it from the objective assessment of security threats. Proposes mechanisms of encryption, protection, authentication, and verification as antecedents of perceived information security. These mechanisms are derived from technological solutions to security threats that are visible to consumers and hence contribute to actual consumer perceptions. Tests propositions in a study of 179 consumers and shows a significant relationship between consumers’ perceived information security and trust in EC transactions. Explores the role of limited financial liability as a surrogate for perceived security. However, the findings show that there is a minimal effect of financial liability on consumers’ trust in EC. Engenders several new insights regarding the role of perceived security in EC transactions.

Keywords: Computer security, Liability, Internet, Electronic commerce, Finance, Encryption

Suggested Citation

Chellappa, Ramnath K. and Pavlou, Paul A., Perceived Information Security, Financial Liability and Consumer Trust in Electronic Commerce Transactions (2002). Logistics Information Management, Volume 15 . Number 5/6 . 2002 . pp. 358-368. Available at SSRN: https://ssrn.com/abstract=2380722

Ramnath K. Chellappa

Emory University - Goizueta Business School ( email )

1300 Clifton Road
Atlanta, GA 30322-2722
United States
(404) 727 7599 (Phone)
(404) 727 2053 (Fax)

HOME PAGE: http://www.bus.emory.edu/ram

Paul A. Pavlou (Contact Author)

Temple University - Department of Management Information Systems ( email )

1810 N. 13th Street
Floor 2
Philadelphia, PA 19128
United States

Temple University - Department of Strategic Management ( email )

Fox School of Business and Management
Philadelphia, PA 19122
United States

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