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A Behavioural Analysis of Online Privacy and Security

Michelle Baddeley

Cambridge Working Papers in Economics from Faculty of Economics, University of Cambridge

Abstract: Psychological and sociological factors constrain economic decision-making in many contexts including the online world. Behavioural economics and economic psychology emphasise that people will make mistakes in processing information and in planning for the future; these mistakes will also distort learning processes. Emotions and visceral factors will play a key role - not only a ecting people's actions but also distorting the interactions between information, learning and choices. This will have wide-ranging implications for online behavior and information security management, making people more vulnerable to security/privacy abuses including hacking, spam attacks, phishing, identity theft and online financial exploitation. These vulnerabilities raise crucial policy questions - recently made more pressing in the light of recent phone-hacking scandals in the UK. This paper outlines some of the behavioural factors affecting people's online behaviour and analyses real-world reactions to online fraud using evidence from the British Crime Survey 2009-10.

Keywords: Behavioural economics; information security; online fraud; cognitive bias (search for similar items in EconPapers)
JEL-codes: D03 D18 D83 K42 (search for similar items in EconPapers)
Date: 2011-07-25
New Economics Papers: this item is included in nep-cbe, nep-evo, nep-hme, nep-ict and nep-neu
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