Effect of Perceived Risk on E-Commerce Acceptance: State of the Art and Future Research Directions

Effect of Perceived Risk on E-Commerce Acceptance: State of the Art and Future Research Directions

Ángel Herrero-Crespo (Universidad de Cantabria, Spain) and Ignacio Rodríguez-del-Bosque (Universidad de Cantabria, Spain)
DOI: 10.4018/978-1-61520-611-7.ch068
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Abstract

The risk or uncertainty perceived on a conduct (e.g. purchasing or consuming of a product, or using an information system) by the individuals has been traditionally identified as one of the main determinants of consumer behavior. In particular, the influence of perceived risk has been specially linked to high involvement products or conducts (Laurent & Kapferer, 1985) which imply a high value or concern for the individual, and that are usually purchased after long and careful consideration. In the specific context of e-commerce, perceived risk has been traditionally identified as one of the main barriers for Internet shopping acceptance and diffusion (Korgaonkar & Wolin, 1999; Goldsmith & Lafferty, 2001; Miyazaki & Fernández, 2001; Wu & Wang, 2005). However, the empirical evidence available regarding this issue is contradictory, and some authors have found that the influence exerted by perceived risk on consumers’ online shopping behavior may not be so relevant (Jarvenpaa & Todd, 1997; Herrero & Rodríguez del Bosque, 2008).
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Background: Concept Of Perceived Risk In E-Commerce

Since it was introduced in the marketing and consumer behavior literature (Bauer, 1960), the perceived risk concept has been analyzed from diverse perspectives. Thus, the classical theory of decision conceives this variable as a distribution that reflects the behavior possible results, probabilities and subjective values (Pratt, 1964; Arrow, 1965). From a similar perspective, first analyses of perceived risk in the context of consumer behavior agree in defining this variable as a combination of two factors: the probability of loss as a consequence of certain behavior and the importance attributed to that loss (Kogan & Wallach, 1964; Cunningham, 1967; Cox, 1967). Nevertheless, some authors such as Sjoberg (1980) criticize this conception of perceived risk as they consider it too rigid and specific to cover such an ambiguous variable. Following this approach, Stone & Winter (1987) break away from the expectation-value traditional normative orientation and consider the perceived risk exclusively as a subjective expectation of loss (Mitchell, 1999). Finally, perceived risk has been traditionally linked to the concept of uncertainty. Thus, diverse authors have suggested that both concepts are equivalent (Bauer, 1960; Taylor, 1974). On the contrary, other researchers consider that risk and uncertainty are different concepts (Peter & Ryan, 1976; Stone & Gronhaug, 1993), but acknowledge that the distinctions between both terms have become blurred in consumer research, and risk and uncertainty are used interchangeably.

Key Terms in this Chapter

Psychological risk: Potential loss of self-esteem (ego loss) from the frustration of not achieving a buying goal.

Economic (monetary or financial) risk: The potential monetary outlay associated with the initial purchase price as well as the subsequent maintenance cost of the product, and the potential financial loss due to fraud

Time risk: Potential loss of time associated with making a bad purchasing decision by wasting time researching and making the purchase, only to have to replace it if it does not perform to expectations.

Functional (or Performance risk): The possibility of the product malfunctioning and not performing as it was designed and advertised and therefore mailing to deliver the desired benefits.

Vendor risk: Degree to which individuals believe that if the purchase products or services through the Internet they will suffer losses caused by Internet vendors.

Privacy risk: Potential loss of control over personal information, Such as when information about you is used without your knowledge or permission.

Social risk: Potential loss of status in one’s social group as a result of adopting a product or service, looking foolish or untrendy.

Product risk: Degree to which individuals believe that if the purchase products or services through the Internet they will suffer losses caused by products.

Technology risk: Degree to which individuals believe that if the purchase products or services through the Internet they will suffer losses caused by the Internet and its related technologies.

Perceived risk: Consumers’ subjective expectation of loss derived from a behavior.

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