Data Donations for Digital Contact-Tracing: Short- and Long-term Effects of Monetary Incentives
69 Pages Posted: 22 Feb 2021 Last revised: 24 Nov 2021
Date Written: November 10, 2021
Data donations promise to unlock the social benefits of personal data. Most recently, contact-tracing apps have been developed to collect individuals' donated contact and health data to fight the COVID-19 pandemic. As the effectiveness of contact-tracing apps hinges critically on widespread app installation and continuous usage, we investigate whether monetary incentives can stimulate app adoption and data donations: In a randomized controlled online experiment, the effects of different monetary incentive mechanisms on verified installations as well as short- and long-term usage of the German Corona-Warn-App (CWA) are evaluated. We find monetary incentives to be effective in the short run as they significantly increase app installations and app usage 14 days after installation, tripling the number of users compared to no compensation. An additional choice of non-monetary compensation in the form of an optional charity donation is found to be ineffective in promoting installations or usage beyond outcomes of monetary incentives, suggesting that there is no substantial crowding-out of intrinsic motives in the short run. From a theoretical perspective, this is in line with 'avoidance of stigma' being the primary pro-social motivation for the adoption of contact-tracing apps. However, the positive adoption stimulus of monetary incentives vanishes in the long run: After eight months, adopters in treatments with extrinsic monetary incentives are significantly more likely to have stopped using the app than intrinsically motivated adopters who do not receive monetary incentives. This suggests that one-time payments are not sufficient to promote app usage and data donations in the long run. Finally, we present experimental evidence that empirical analyses based on hypothetical scenarios without verified actions are prone to over-estimating individuals' pro-social behavior in the context of data donations.
Keywords: data donation, data altruism, contact-tracing apps, health privacy, app adoption, incentives, pro-social behavior, hypothetical bias, online experiment, behavioral economics, COVID-19
JEL Classification: I12, H41, D64
Suggested Citation: Suggested Citation