The Digital Privacy Paradox: Small Money, Small Costs, Small Talk

Susan Athey, Christian Catalini and Catherine Tucker

No 23488, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: 'Notice and Choice' has been a mainstay of policies designed to safeguard consumer privacy. This paper investigates distortions in consumer behavior when faced with notice and choice which may limit the ability of consumers to safeguard their privacy using field experiment data from the MIT digital currency experiment. There are three findings. First, the effect small incentives have on disclosure may explain the privacy paradox: Whereas people say they care about privacy, they are willing to relinquish private data quite easily when incentivized to do so. Second, small navigation costs have a tangible effect on how privacy-protective consumers' choices are, often in sharp contrast with individual stated preferences about privacy. Third, the introduction of irrelevant, but reassuring information about privacy protection makes consumers less likely to avoid surveillance, regardless of their stated preferences towards privacy.

JEL-codes: C93 D62 D8 K10 O3 O31 O38 (search for similar items in EconPapers)
Date: 2017-06
New Economics Papers: this item is included in nep-des, nep-exp, nep-ict, nep-law and nep-pay
Note: PR
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (79)

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Working Paper: The Digital Privacy Paradox: Small Money, Small Costs, Small Talk (2017)
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