The Effect of Online Privacy Information on Purchasing Behavior: An Experimental Study

Janice Y. Tsai (), Serge Egelman (), Lorrie Cranor () and Alessandro Acquisti
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Janice Y. Tsai: Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
Serge Egelman: Carnegie Mellon University, Pittsburgh, Pennsylvania 15213
Lorrie Cranor: Carnegie Mellon University, Pittsburgh, Pennsylvania 15213

Information Systems Research, 2011, vol. 22, issue 2, 254-268

Abstract: Although online retailers detail their privacy practices in online privacy policies, this information often remains invisible to consumers, who seldom make the effort to read and understand those policies. This paper reports on research undertaken to determine whether a more prominent display of privacy information will cause consumers to incorporate privacy considerations into their online purchasing decisions. We designed an experiment in which a shopping search engine interface clearly and compactly displays privacy policy information. When such information is made available, consumers tend to purchase from online retailers who better protect their privacy. In fact, our study indicates that when privacy information is made more salient and accessible, some consumers are willing to pay a premium to purchase from privacy protective websites. This result suggests that businesses may be able to leverage privacy protection as a selling point.

Keywords: privacy; information systems; economics; experimental economics; e-commerce (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (130)

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