Economics of Cybercrime The Influence of Perceived Cybercrime Risk - PowerPoint PPT Presentation

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime The Influence of Perceived Cybercrime Risk on Online Service Adoption of European Internet Users living knowledge WWU Münster Markus Riek, June 23, 2014 Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 2 /24 Agenda A. Perceived Cybercrime Risk and Online Service Adoption B. The “Technology Avoidance Model” C. Data and Methodology living knowledge D. Results WWU Münster E. Conclusions , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 3 /24 Cybercrime Risk and Online Service Adoption Online services provide extensive economic and social benefits ◮ Less expensive, more convenient, faster, higher product variability and availability living knowledge WWU Münster Anderson et al. (2013) [1] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 3 /24 Cybercrime Risk and Online Service Adoption Online services provide extensive economic and social benefits ◮ Less expensive, more convenient, faster, higher product variability and availability Consumer-oriented cybercrime is a threat to these benefits ◮ Indirect costs of cybercrime are the largest amount ◮ Indirect costs are driven by online service avoidance living knowledge WWU Münster Anderson et al. (2013) [1] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 3 /24 Cybercrime Risk and Online Service Adoption Online services provide extensive economic and social benefits ◮ Less expensive, more convenient, faster, higher product variability and availability Consumer-oriented cybercrime is a threat to these benefits ◮ Indirect costs of cybercrime are the largest amount ◮ Indirect costs are driven by online service avoidance living knowledge Research Question: What makes Internet users hesitate ? WWU Münster ◮ Validate influence of perceived cybercrime risk on avoidance ◮ Investigate antecedents of perceived cybercrime risk ◮ Look how different types of users perceive risk Anderson et al. (2013) [1] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 4 /24 Acceptance Models for Online Services Technology Acceptance Model (TAM) Perceived Usefulness + living knowledge External Intention + Actual + Variables to Use Usage WWU Münster + Perceived Ease of Use Venkatesh & Davis (1996) [5] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 5 /24 Acceptance Models for Online Services TAM extended with Perceived Risk − Financial Risk Perceived Privacy Risk Usefulness + − Performance living knowledge Risk Perceived Intention + WWU Münster Risk to Use Time Risk + − Perceived Social Risk Ease of Use Psychological Risk Featherman & Pavlou (2003) [3] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 5 /24 Acceptance Models for Online Services Cybercrime perspective on online service avoidance + Financial Risk Perceived Privacy Risk Usefulness + − Performance living knowledge Risk Perceived Avoidance Cybercrime + WWU Münster Intention Risk Time Risk − + Perceived Social Risk Ease of Use Psychological Risk , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 6 /24 Antecedents of Perceived Risk of Cybercrime Risk perception of traditional (offline) crime ◮ Prior victimization increases perceived risk ◮ Media reports increase perceived risk living knowledge WWU Münster , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 6 /24 Antecedents of Perceived Risk of Cybercrime Risk perception of traditional (offline) crime ◮ Prior victimization increases perceived risk ◮ Media reports increase perceived risk Cybercrime Experience living knowledge WWU Münster + Perceived + Media Cybercrime Awareness Risk , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 7 /24 The “Technology Avoidance Model” Cybercrime Experience + Perceived + + Media Avoidance living knowledge Cybercrime Awareness Intention Risk WWU Münster , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 7 /24 The “Technology Avoidance Model” Cybercrime Experience + Perceived + + Media Avoidance living knowledge Cybercrime Awareness Intention Risk WWU Münster ◮ Perceived Cybercrime Risk increases Avoidance Intention , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 7 /24 The “Technology Avoidance Model” Cybercrime Experience + Perceived + + Media Avoidance living knowledge Cybercrime Awareness Intention Risk WWU Münster ◮ Perceived Cybercrime Risk increases Avoidance Intention ◮ Cybercrime Experience and Media Awareness increase Perceived Cybercrime Risk , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 7 /24 The “Technology Avoidance Model” Cybercrime User Experience Confidence + Perceived + + Media Avoidance living knowledge Cybercrime Awareness Intention Risk WWU Münster ◮ Perceived Cybercrime Risk increases Avoidance Intention ◮ Cybercrime Experience and Media Awareness increase Perceived Cybercrime Risk ◮ User Confidence moderates the effects and latent variables , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 8 /24 Eurobarometer 390 Cyber Security Report Report on Internet usage and security concerns of EU citizens ◮ Commissioned by the European Commission ◮ Conducted in 2012 in all 27 member states ◮ 26,593 responses Representative sample of EU Internet users above the age of 15 ◮ ~ 1,000 responses per country living knowledge ◮ Random route and closest birthday rules within countries WWU Münster ◮ Stratification by country Internet users ~ 18,000 (daily access by 53 % ) European Commission (2012) [2] , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 9 /24 Measurement of constructs Avoidance Intention of online services “Due to security concerns I am less likely to use ... ?” ◮ Single binary item ◮ One model per online service Currently Avoidance living knowledge Using Intention WWU Münster Online shopping 53 % 18 % Online banking 48 % 15 % Online social networking* 52 % 37 % *Proxy: “Less likely to give personal information on websites” , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 10 /24 Measurement of constructs Perceived Cybercrime Risk “How concerned are you personally about becoming a victim of or encountering ... ?” 40 % living knowledge 20 % WWU Münster 0 % Not at all Not very Fairly Very Spam Online fraud Identity theft Illegal content Child pornography Unavailable services , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 11 /24 Measurement of constructs Cybercrime Experience “How often have you experienced or been victim of one of the following situations ... ?” 100 % 80 % living knowledge 60 % WWU Münster 40 % 20 % 0 % Never Occasionally Often Spam Online fraud Identity theft Illegal content Unavailable services , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 11 /24 Measurement of constructs Cybercrime Experience “How often have you experienced or been victim of one of the following situations ... ?” 100 % Spam: 80 % “Received emails fraudulently living knowledge asking for money or personal 60 % details.” WWU Münster 40 % 20 % 0 % Never Occasionally Often Spam Online fraud Identity theft Illegal content Unavailable services , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 12 /24 Measurement of constructs Media Awareness “In the last year have you heard anything about cybercrime from one of the following sources ... ?” 67% TV living knowledge 23% Newspaper WWU Münster 34% Internet 35% Radio 0 % 20 % 40 % 60 % 80 % 100 % , , Markus Riek, Rainer Böhme, Tyler Moore

W ESTFÄLISCHE W ILHELMS -U NIVERSITÄT M ÜNSTER Economics of Cybercrime 13 /24 Methodology Secondary analysis using Structural Equation Modelling (SEM) Benefits Limitations Secondary Representative sample; Available questions; analysis Sophisticated surveying Short answer scales; process; Unvalidated measurement scales; living knowledge Heterogeneous data; WWU Münster SEM Categorical indicators; Sampling weights; Missing values; Model fit indices; Muthen et al. (1997) [4] , , Markus Riek, Rainer Böhme, Tyler Moore