Secondary Market Monetization and Willingness to Share Personal Data

People are often unaware that their personal data can serve as valuable inputs for economic activities in secondary data markets. However, whether secondary monetization of personal data determines privacy preferences remains unclear. I examine whether privacy decisions are motivated by the data recipient’s ability to benefit from trading individuals’ data with a third party. A large online laboratory experiment involving personally identifiable psychometric data is implemented with real data-sharing consequences and monetary benefits. I find that individuals decrease their willingness to share data—both in terms of their likelihood of participating in the data market and the prices demanded for such participation—when the recipient’s ability to monetize the data through secondary trade is salient. Strategic responses to updated beliefs about the recipient’s gain from the trade are ruled out via the chosen price elicitation. I find that increased data exposure (to more recipients) does not explain the significant revealed disutility from secondary monetization. These findings are also robust to controlling for the risk exposure differences between data recipients and third parties.