Predicting Consumer Reaction To Online Privacy Concerns: A Nested Logit Model

Abstract

This paper proposes a theoretical choice model to explain how consumers may react to their concerns regarding online information privacy. A nested logit model is suggested as the appropriate model to predict the choice of online privacy risk management strategies by consumers. Conceptual justification is provided for the proposed model. The validity of the major assumptions behind the model in the context of Internet use is explained. Managerial implications and future research directions are also discussed.