The relation between privacy protection and risk attitudes, with a new experimental method to elicit the implicit monetary value of privacy

Alisa Frik and Alexia Gaudeul

No 296, University of Göttingen Working Papers in Economics from University of Goettingen, Department of Economics

Abstract: We investigate the decision of experimental subjects to incur the risk of revealing personal private information to other participants. We do so by using a novel method to generate personal information that reliably induces privacy concerns in the laboratory. We show that individual decisions to incur privacy risk are correlated with decisions to incur monetary risk. We find that partially depriving subjects of control over the revelation of their personal information does not lead them to lose interest in protecting it. We also find that making subjects think of privacy decisions after financial decisions reduces their aversion to privacy risk. Finally, surveyed attitude to privacy and explicit willingness to pay or to accept payment for personal information correlate well with willingness to incur privacy risk. Having shown that privacy loss can be assimilated to a monetary loss, we compare decisions to incur risk in privacy lotteries with risk attitude in monetary lotteries to derive estimates of the implicit monetary value of privacy. The average implicit monetary value of privacy is about equal to the average willingness to pay to protect private information, but the two measures do not correlate at the individual level. We conclude by underlining the need to know individual attitudes to risk to properly evaluate individual attitudes to privacy as such.

Keywords: privacy; disclosure; risk; control; personal information; experiment (search for similar items in EconPapers)
JEL-codes: C91 D81 O30 (search for similar items in EconPapers)
Date: 2016
New Economics Papers: this item is included in nep-cbe, nep-exp and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (2)

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Persistent link: https://EconPapers.repec.org/RePEc:zbw:cegedp:296

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