Pay for Privacy? That Depends

LOS ANGELES—Are consumers willing to pay more for privacy? The answer depends on how the question is asked.

During the California and Nevada league’s annual REACH Conference here, Allessandro Acquisti, associate professor of information systems and public policy at the Heinz College of Carnegie Mellon University, shared an anecdote that he readily admitted leads to as many questions as conclusions.

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To illustrate what he called the “behavioral economics of privacy, “ he told the story of an experiment in which he was involved at a mall in Pittsburgh. In the experiment, people were asked to take a survey, but the survey was a ruse. At the end of the survey consumers were given two choices, but those choices were presented in two ways. In the first option, consumers were told a $10 gift card was available in which any purchases made would be anonymous. But a $12 card was also available, but its purchases would be tracked to the name linked to the card.

The second option presented those options in reverse. Consumers were offered the $12 card with the same strings, and then told a $10 card was also available with no strings.

“In short, people were told they would be given $2 for their data, while the other group was told they had to give back $2 to protect their data,” explained Acquisti. “But in both, it was the identical deal. The only thing that changed was how the trade-off was presented.”

What The Results Showed

The results: When the subjects were given the $10 card with the option to get the $12 card, 51% kept it, saying they don’t want to give up privacy for $2. But in the second group, just 9% said they would give up the $2 for privacy.

“So what is the value of data for consumers? We don’t know,” admitted Acquisti. “The value can change dramatically depending on how you frame it for the consumer.”

Acquisti, who studies issues around privacy, said he expects to see ongoing, robust development of PETS, or privacy enhancing technologies, such as anonymous browsing, encrypted emails, protected search, and more.

Acquisti later moderated a panel during which credit unions were strongly challenged to remember their mission as member-owned organizations when it comes to privacy and disclosure. That story can be found here.

Section: Standard
Word Count: 514
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Copyright Year: 2019
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