The Privacy Elasticity of Behavior: Conceptualization and Application

Inbal Dekel, Rachel Cummings, Ori Heffetz and Katrina Ligett

No 30215, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: We propose and initiate the study of privacy elasticity—the responsiveness of economic variables to small changes in the level of privacy given to participants in an economic system. Individuals rarely experience either full privacy or a complete lack of privacy; we use differential privacy—a computer-science theory increasingly adopted by industry and government—as a standardized means of quantifying continuous privacy changes. The resulting privacy measure implies a privacy-elasticity notion that is portable and comparable across contexts. We discuss applications, and demonstrate the feasibility of this approach by estimating the privacy elasticity of public-good contributions in a lab experiment.

JEL-codes: C91 D82 Z00 (search for similar items in EconPapers)
Date: 2022-07
New Economics Papers: this item is included in nep-exp
Note: AG LE PE
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