Towards a Utility Theory of Privacy and Information Sharing and the Introduction of Hyper-Hyperbolic Discounting in the Digital Big Data Age

Economics is concerned about utility. Utility theory captures people’s preferences or values. As one of the foundations of economic theory, the wealth of information and theories on utility lacks information about decision-making conflicts between preferences and values. The preference for communication is inherent in human beings as a distinct feature of humanity. Leaving a written legacy that can inform many generations to come is a humane-unique advancement of society. At the same time, however, privacy is a core human value. People choose what information to share with whom and like to protect some parts of their selves by secrecy. Protecting people’s privacy is a codified virtue around the globe grounded in the wish to uphold individual’s dignity. Yet to this day, no utility theory exists to describe the internal conflict arising from the individual preference to communicate and the value of privacy. In the age of instant communication and social media big data storage and computational power; the need for understanding people’s trade off between communication and privacy has leveraged to unprecedented momentum. For one, enormous data storage capacities and computational power in the e-big data era have created unforeseen opportunities for big data hoarding corporations to reap hidden benefits from individual’s information sharing, which occurs bit by bit in small tranches over time.