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Unwillingness to Pay for Privacy: A Field Experiment

Author

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  • 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 of Labor Economics (IZA).
  • Handle: RePEc:iza:izadps:dp5017
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    References listed on IDEAS

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    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. Janice Y. Tsai & Serge Egelman & Lorrie Cranor & Alessandro Acquisti, 2011. "The Effect of Online Privacy Information on Purchasing Behavior: An Experimental Study," Information Systems Research, INFORMS, vol. 22(2), pages 254-268, June.
    3. 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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    More about this item

    Keywords

    privacy; willingness to pay; field experiments;
    All these keywords.

    JEL classification:

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

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