Online buyers value privacy, but not much

Behavioral study shows price people put on privacy is lower than they say


  • Regulatory frameworks (and corporate pricing policies) should allow companies to offer a range of tradeoffs to customers: higher cost for more privacy, lower cost for less.
  • In both cases web sites should make clear the data they demand, potential benefit of providing more private data and allow consumers to choose settings that reflect the value they put on both data and purchase price.
  • Regulations requiring that web sites exchange personal profiles of customers would make switching from one vendor to the other easier and less expensive for consumers, but it should be up to consumers whether or not their individual profile should be passed around. – Study on Monetising Privacy (paraphrased), published by European Network and Information Security Agency (EISA) 3/23/2012
Economics of privacy: experimental results
Provide more data Same price Market share Price difference Market share
Site A Demands cell number 17% - 69%
Site B No cell number 83% .5 Euro (66¢) extra 31%
Receive more ads Same price Market share Price difference Market share
Site A Will email ads 38% - 87%
Site B Won't email ads 62% .5 Euro (66¢) extra 13%

Read more of Kevin Fogarty's CoreIT blog and follow the latest IT news at ITworld. Follow Kevin on Twitter at @KevinFogarty. For the latest IT news, analysis and how-tos, follow ITworld on Twitter and Facebook.

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