The value of privacy as data becomes commoditised: An experimental investigation

The rapid proliferation of smartphones and move towards integrated technological platforms by corporate organisations has led to an ever increasing amount of personal data being captured on a daily basis. Information once... [ view full abstract ]

The rapid proliferation of smartphones and move towards integrated technological platforms by corporate organisations has led to an ever increasing amount of personal data being captured on a daily basis. Information once considered sensitive such as bank accounts, medical records, consumption patterns and geolocation are now considered the building blocks of new business for organisations. It is therefore unsurprising that privacy preferences and attitudes towards risk and privacy protection now play an important role in the digital age we find ourselves.

During our online interactions we encounter organisations collecting our private data, either to construct personal advertisements, build a profile of our credit history, prevent us from terror attacks, or to improve our health. The value of this private data to organisations depends on the potential ability to forecast future behaviour or obtain competitive advantage from it. On the other hand the value our personal data has for us most likely depends on the benefits we gain when we share this data with those very same organisations. As the value of private data becomes commoditised the role and importance of research in the area of privacy will increase.

In this current paper we conducted a series of incentivised stated preference discrete choice experiments in which individuals Willingness To Accept (WTA) payment for the disclosure of their private information was derived. We also included generic questions surrounding trust, risk, and appetite for risk within defined situations - allowing for a cross-analysis and correlation of perceived risk and actual observed risk with the data collected from the experiments. This provided a more rigorous understanding as to the effects of risk perception and individual risk appetite on personal information disclosure.