When data security goes wrong: Examining the impact of stress, social contract violation, and data type on consumer coping responses following a data breach

Abstract

Data breaches and misuse of data are rising, causing compromised consumer privacy. This research explores the impact of stress and perceptions of a social contract violation have on both firm-focused outcomes and consumer protection behaviors following a data breach. Additionally, we investigate the impact that the type of data lost/compromised in the breach– personally identifiable (PII) and non-personally identifiable (NPII)– has on these outcomes. To explore this, we conduct an experimental survey (Study 1) of 230 respondents. Results indicate that stress and perceptions of social contract violation impact our outcome variables. The results differences in terms of how these impact consumer coping behaviors across different data types (PII vs. NPII). In Study 2 we explore how industry clusters differ in their levels of stress and social contract violation, actions businesses can take to them, and whether these actions could help reduce negative consumer responses.