Strategic responses to personalized pricing and demand for privacy: An experiment

Inacio Bo, Li Chen and Rustamdjan Hakimov

Games and Economic Behavior, 2024, vol. 148, issue C, 487-516

Abstract: We consider situations in which consumers are aware that a statistical model determines the price of a product based on their observed behavior. Using a novel experiment varying the context similarity between participant data and a product, we find that participants manipulate their responses to a survey regarding personal characteristics, and manipulation is more successful when the contexts are similar. Moreover, participants demand less privacy, and make less optimal privacy choices when the contexts are less similar. Our findings highlight the importance of data privacy policies in the age of big data, in which behavior in apparently unrelated contexts might affect prices.

Keywords: Price discrimination; Personalized pricing; Strategic behavior; Privacy; Experiments (search for similar items in EconPapers)
JEL-codes: C91 D91 L11 M38 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
http://www.sciencedirect.com/science/article/pii/S0899825624001544
Full text for ScienceDirect subscribers only

Related works:
Working Paper: Strategic Responses to Personalized Pricing and Demand for Privacy: An Experiment (2024)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:eee:gamebe:v:148:y:2024:i:c:p:487-516

DOI: 10.1016/j.geb.2024.10.008

Access Statistics for this article

Games and Economic Behavior is currently edited by E. Kalai

More articles in Games and Economic Behavior from Elsevier
Bibliographic data for series maintained by Catherine Liu ().