Risk Perception, Trust and Credibility

1. Risk Perception, Trust and Credibility Cmpe 471-03 fall 2001

2. SECURITY • SCOPE: • Analyse security from a social sciences point of view rather than technical • Security is a cost that has to be justified • Perception of risks determine the level of security that needs to be implemented

3. SECURITY • debate on: companies should understand how much security is needed before designing bulky security systems especially in internet applications • understand how risks are perceived by different stakeholders namely customers • understand the factors that contribute to forming and changing risk perception.

4. RISK • Possibility of suffering harm or loss, a factor, course or element involving uncertain danger

5. OPPORTUNITY & THREAT

6. THEORETICAL FRAMEWORK • Important parameter in designing security systems is the COST RİSK ASSESSMENT • Risk perception • psychological theory of risk: how the general public reacts to uncertainitiesof danger, and how this general reaction affects individual behaviour. • cultural theory of risk:Risk perception differs depending on the social group & belief system an individual belongs to (Douglas 1970)

7. Reacting to Threats THREAT RESPONSE communication RISK PERCEPTION Passive Reaction

8. Reacting to Threats RISK MANAGEMENT External danger RISK PERCEPTION Organisation Structure Shared Meaning and Trust

9. CULTURAL THEORY • When we try to think of the individual in a social context, we normally think of the corporate group or groups to which they belong. • Individuals also have constraining classifications within the group: hierarchy, kinship, race, gender, age...

10. CULTURAL THEORY Four types of social environment and cultural biases (Douglas 1970) Fatalists Hierarchists B C Grid (Individual) Individualist Egalitarians A D Group (Social incorporation)

11. A: competitive, control people, autonomy; see risks with opportunities B: no voluntary risk taking, but accept it as a given, no personal autonomy C: group is emphasised; division of labour, specialisation, segregation of duties. Take risks iff it is approved by experts; hierarchical authority D: members get their support from the group; no formal delegation. The group dissolves in the absence of strong leadership CULTURAL THEORY Fatalists Hierarchists B C individual Individualist Egalitarians A D group

12. CULTURE AND RISK • Risk behaviour is a function of how human beings, individually and in groups, perceive their place in the world. • It is important to understand the role of culture in stakeholder interaction in order to understand cultural biases in risk perception.

13. STAKEHOLDER MODEL • Stakeholders • Users: information user • Suppliers: information provider and systems developer • Others: systems manager • Each stakeholder group has a differing perceptions of same risk. • Stakeholders can be grouped within themselves depending on the social groups they belong to rather than roles they assume.

14. STAKEHOLDER MODEL Links stakeholder model with the cultural theory

15. STAKEHOLDER MODEL • Individuals have different cultural biases and have different perceptions of risk • computer privacy and security rules are different in different countries • Singapore, Japan, US, Canada • Grouping stakeholders is not enough for designing IS.

16. RISK COMMUNICATION • It is important to know the cultural backgrounds of the stakeholders • how they perceive risks • how they communicate risks • risk communication theory • risk communication model

17. RISK COMMUNICATION • Past: • risk communication as one way to general public from government… • efforts to improve risk communication • to get the message across by describing the magnitude and balance of the attendant costs and benefits

18. RISK COMMUNICATION • The costs and benefits are equally distributed across a society • People do not agree about which events or actions do the most harm or which benefits are more worth seeking.

19. RISK COMMUNICATION US National Research Counsil (1989) Risk communication is an interactive process of exchange of information and opinion among individuals, groups and institutions. It involves multiple messages about the nature of the risk and other messages, not strictly about risk, that express concerns, opinions and reactions to risk messages or to legal and institutional arrangements for risk management. Top-down definition of risk

20. RISK COMMUNICATION • Risk Communication • risks posed to stakeholders on the web are technological hazards • classical risk communication model: • sources • transmitters • receivers Certain aspects of risks are intensified or attenuated

21. CULTURE Risk Event Transmitters Media Institutions/Agencies Interest Groups Opinion Leaders Two-way interaction Sources Scientists Agencies Interest Groups Eyewitnesses Portrayal of Event with symbols, signals and images by the Sources Receivers General Public Affected Organisations/Institutions Social Groups Other target audience feedback

22. Initial Information HEAR CULTURE SOCIAL FASHION PERSONAL VALUES RELATED ATTITUDES INFLUENCES Appeal Do not Appeal UNDERSTAND BELIEVE New Information PERSONALIZE RESPOND

23. Communication • The recipient hears the information and then screens it based on social fashion, personal values, attitudes under the influence from peer groups • cultural forces before understanding the message • Believing involves acceptance that the understanding is correct • the risk is real • Personalisation • the risk event will affect the receiver • Response • decision to take action for protection from risk

24. Communication • Credibility of information sources and transmitters is a key issue in risk communication

25. TRUST AND CONFIDENCE VS CREDIBILITY • Trust is an important ingredient in any trade transaction • Trust acts as the mitigating factor for the risks assumed by one party on the party in the trade • As trust increases the risks either reduce or become manageable by the trusting party • Existence of trust also reduces the transaction cost in a trade

26. TRUST For effective communication of risks it is critically important that receivers place trust on the sources and transmitters (Lee 1986) Five levels of trust analysis framework

27. INSTITUTIONAL CREDIBILITY • Confidence in business and economic organisations depends on the perceived quality of their services, but also on the employment situation, the perception of power monopolies in business, the observation of allegedly unethical behaviour and the confidence in other institutions • Confidence in political institutions depends on their performance record and openness, but in addition on the perception of a political crisis, the belief that the government is treating everyone fair and equally, the belief in functioning of checks and balances, the perception of hidden agendas, and the confidence in other institutions

28. INSTITUTIONAL CREDIBILITY • The more educated people are, the more they express confidence in the system, but the more they are also disappointed about the performance of the people representing the system • Political conservatism correlates positively with confidence in business and negatively with government and public service

29. INSTITUTIONAL CREDIBILITY • The social climate pre-sets the conditions under which an institution has to operate to gain and maintain trust • in a positive climate people invest more in trust institutions • in a negative climate people tend to caution and seek to have more control

30. Risk Perception, Trust and Credibility • Hypothesis: • once trust and credibility exist in a relationship among the stakeholders during risk communication, stakeholders do not get involved in the analysis of risk factors individually, and • information systems security becomes less important to people when dealing with a trustworthy and credible institution.

31. Risk Perception, Trust and Credibility • Personality of the communicator with attributes of ability and integrity are also important in establishing trust. • Overall; message, communicator, institution, and the social context are the major factors in establishing trust within an organisation.

32. Risk Perception, Trust and Credibility • Inferential analysis: • inverse correlation between trust and security on the internet • the higher the trust placed on an organisation the lower was the security concern.