User Compensation as a Data Breach Recovery Action: An Investigation of the Sony PlayStation Network Breach1

Sigi Goode; Hartmut Hoehle; Viswanath Venkatesh; Susan A. Brown

doi:10.25300/misq/2017/41.3.03

User Compensation as a Data Breach Recovery Action: An Investigation of the Sony PlayStation Network Breach1

Sigi Goode¹; Hartmut Hoehle²; Viswanath Venkatesh²; Susan A. Brown³

¹ Research School of Management, College of Business and Economics, Australian National University, Canberra, ACT, Australia · ² Department of Information Systems, Sam M. Walton College of Business, University of Arkansas, Fayetteville, AR 72701 U.S.A. · ³ Department of Management Information Systems, University of Arizona, 1130 East Helen Street, Tucson, AZ 85721-0108 U.S.A.

MIS Quarterly 2017

Drawing on expectation confirmation research, we develop hypotheses regarding the effect of compensation on key customer outcomes following a major data breach and consequent service recovery effort. Data were collected in a longitudinal field study of Sony customers during their data breach in 2011. A total of 144 customers participated in the two-phase data collection that began when the breach was announced and concluded after reparations were made. Using polynomial modeling and response surface analysis, we demonstrate that a modified assimilation–contrast model explained perceptions of service quality and continuance intention and a generalized negativity model explained repurchase intention. The results of our work contribute to research on data breaches and service failure by demonstrating the impacts of compensation on customer outcomes. We discuss theoretical and practical implications.

DOI: 10.25300/misq/2017/41.3.03
Volume: 41 (3)
Pages: 703-727
Language: en
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