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Unwillingness to Pay for Privacy: A Field Experiment

Author

Listed:
  • Beresford, Alastair R.

    () (University of Cambridge)

  • Kübler, Dorothea

    () (WZB - Social Science Research Center Berlin)

  • Preibusch, Sören

    () (University of Cambridge)

Abstract

We measure willingness to pay for privacy in a field experiment. Participants were given the choice to buy a maximum of one DVD from one of two online stores. One store consistently required more sensitive personal data than the other, but otherwise the stores were identical. In one treatment, DVDs were one Euro cheaper at the store requesting more personal information, and almost all buyers chose the cheaper store. Surprisingly, in the second treatment when prices were identical, participants bought from both shops equally often.

Suggested Citation

  • Beresford, Alastair R. & Kübler, Dorothea & Preibusch, Sören, 2010. "Unwillingness to Pay for Privacy: A Field Experiment," IZA Discussion Papers 5017, Institute for the Study of Labor (IZA).
  • Handle: RePEc:iza:izadps:dp5017
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    References listed on IDEAS

    as
    1. Benjamin Hermalin & Michael Katz, 2006. "Privacy, property rights and efficiency: The economics of privacy as secrecy," Quantitative Marketing and Economics (QME), Springer, vol. 4(3), pages 209-239, September.
    2. Posner, Richard A, 1981. "The Economics of Privacy," American Economic Review, American Economic Association, vol. 71(2), pages 405-409, May.
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    Keywords

    privacy; willingness to pay; field experiments;

    JEL classification:

    • C93 - Mathematical and Quantitative Methods - - Design of Experiments - - - Field Experiments
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis

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