17.4 Privacy Calculus/ Economics of Privacy
Privacy self-regulation (Kelly D. Martin and Murphy 2016): more prevalent in the US than EU.
(Conitzer, Taylor, and Wagman 2012)
A monopolist model with a continuum of heterogeneous consumers and the option for them to remain anonymous and avoid being recognized as prior customers, maybe at a cost.
When customers have the option to keep their anonymity, they all prefer to do so on an individual basis, which generates the most profit for the monopolist.
Consumers can gain from higher anonymity costs, but only up to a point when the effect turns against them.
It frequently harms consumers if the monopolist or an unaffiliated third party controls the cost of anonymity.
References
Bol, Nadine, Tobias Dienlin, Sanne Kruikemeier, Marijn Sax, Sophie C Boerman, Joanna Strycharz, Natali Helberger, and Claes H de Vreese. 2018. “Understanding the Effects of Personalization as a Privacy Calculus: Analyzing Self-Disclosure Across Health, News, and Commerce Contexts.” Journal of Computer-Mediated Communication 23 (6): 370–88. https://doi.org/10.1093/jcmc/zmy020.
Bowie, Norman E., and Karim Jamal. 2006. “Privacy Rights on the Internet: Self-Regulation or Government Regulation?” Business Ethics Quarterly 16 (3): 323–42. https://doi.org/10.5840/beq200616340.
Conitzer, Vincent, Curtis R. Taylor, and Liad Wagman. 2012. “Hide and Seek: Costly Consumer Privacy in a Market with Repeat Purchases.” Marketing Science 31 (2): 277–92. https://doi.org/10.1287/mksc.1110.0691.
Martin, Kelly D., and Patrick E. Murphy. 2016. “The Role of Data Privacy in Marketing.” Journal of the Academy of Marketing Science 45 (2): 135–55. https://doi.org/10.1007/s11747-016-0495-4.