Disclosure of Personal Information Under Risk of Privacy Shocks
University of Jena; University of Bologna - Department of Economics
January 24, 2011
Individuals disclose an increasing amount of personal information when buying goods or services. Personal details are revealed despite the rising threat of privacy breaches at firms that collect the information. Yet, we know surprisingly little about the trade-offs individuals consider when disclosing personal information in economic transactions. We present this problem as a dynamic lottery with personal information under the risk of privacy shocks. Subjects in the experiment receive private information on whether they are a good or bad type. We explore how the notification about a privacy breach changes an individual's behavior with regard to disclosing such information. This paper describes our experimental design as well as preliminary theoretical predictions.
Keywords: Privacy, information sharing, data protection
JEL Classification: D43, L14, O30
Date posted: January 21, 2012 ; Last revised: April 7, 2012
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