Privacy Protection, Risk Attitudes, and the Need for Control: An Experimental Study

CEEL Working Paper 1-16

81 Pages Posted: 8 Mar 2016

See all articles by Alisa Frik

Alisa Frik

International Computer Science Institute (ICSI) / University of California Berkeley

Alexia Gaudeul

Georg-August-Universität Göttingen

Date Written: February 18, 2016

Abstract

We expose subjects in our experiment to the risk of having to reveal private information to other participants. We show that the decision to incur this risk is driven mainly by their general attitude to monetary risk. Survey attitudes to privacy play only a marginal role in explaining attitudes to privacy risk. Subjects who are more willing to pay or to accept payment for their personal information do not appear to be more or less likely to incur privacy risks than others once their overall level of risk aversion is taken into account. We further test the relation between privacy and control, that is, whether depriving subjects of full control over whether their personal information will be revealed leads them to lose interest in protecting it. We find that this is not the case. We finally find that subjects who are asked for their preferences over monetary risk before being asked for their preferences over privacy risks tend to choose riskier options in privacy lotteries. This provides evidence of the importance of framing for privacy decisions; inducing subjects to think of privacy decisions in the context of financial decisions reduces their aversion to privacy risk.

Keywords: privacy, risk, lotteries, valuation, individual choice, experiment

JEL Classification: D12, D82

Suggested Citation

Frik, Alisa and Gaudeul, Alexia, Privacy Protection, Risk Attitudes, and the Need for Control: An Experimental Study (February 18, 2016). CEEL Working Paper 1-16. Available at SSRN: https://ssrn.com/abstract=2743639 or http://dx.doi.org/10.2139/ssrn.2743639

Alisa Frik

International Computer Science Institute (ICSI) / University of California Berkeley ( email )

Berkeley, CA
United States

Alexia Gaudeul (Contact Author)

Georg-August-Universität Göttingen ( email )

Platz der Goettinger Sieben 3
Goettingen, 37073
Germany
+49 (0) 551 39 7333 (Phone)

HOME PAGE: http://agaudeul.free.fr

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