Delaying Informed Consent: An Empirical Investigation of Mobile Apps' Upgrade Decisions

Management Science

73 Pages Posted: 2 Oct 2019 Last revised: 15 Apr 2024

See all articles by Raveesh Mayya

Raveesh Mayya

New York University (NYU) - Leonard N. Stern School of Business

Siva Viswanathan

University of Maryland - Robert H. Smith School of Business

Date Written: April 14, 2024

Abstract

In response to users’ evolving desire for choice and control over their personal data, numerous platforms across sectors have been updating privacy policies. Unlike public regulations that mandate uniform compliance, many platforms grant a more flexible time window for complementors to adopt privacy policies. While several studies have examined the impact of privacy policies, the consequences of delayed policy adoption under time flexibility remain largely unexplored. This study is among the first to investigate the impact of apps delaying policy adoption in the context of a privacy policy change. The context of our research is the upgrade to Android version 6.0, which gave consumers more control over their personal data. Apps were given a 3-year grace period to adopt the new privacy policy, during which apps that did not adopt the policy could still run on the latest Android version. We leverage this variation in policy adoption by apps to examine its impact on apps’ marketplace outcomes. By installing over 13,691 popular apps on emulators, we detect exactly when each app upgrades to version 6.0. We combine this unique dataset with multiple datasets to quantify the impact of delaying the upgrade. We find that delaying the upgrade results in a significant loss of downloads and user ratings for apps. Frequently maintaining the apps without upgrading can only partially mitigate these declines. In further examining who delays upgrades and why, we find that apps that display in-app-advertising and overreach for permissions are more likely to delay upgrading, suggesting a strategic tradeoff between marketplace outcomes and the ability to collect data continuously. The findings of our study highlight the need to carefully consider participants’ potential strategic behaviors in designing policy implementation. We discuss the theoretical and practical implications of our findings.

Keywords: Privacy of Personal Data, Mobile Apps, Platform Policy Change, Policy Adoption Flexibility

JEL Classification: L86, D04, D22

Suggested Citation

Mayya, Raveesh and Viswanathan, Siva, Delaying Informed Consent: An Empirical Investigation of Mobile Apps' Upgrade Decisions (April 14, 2024). Management Science, Available at SSRN: https://ssrn.com/abstract=3457018 or http://dx.doi.org/10.2139/ssrn.3457018

Raveesh Mayya (Contact Author)

New York University (NYU) - Leonard N. Stern School of Business ( email )

44 West 4th Street
Suite 9-160
New York, NY NY 10012
United States

Siva Viswanathan

University of Maryland - Robert H. Smith School of Business ( email )

College Park, MD 20742-1815
United States

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