Privacy in electronic commerce and the economics of immediate gratification
Open accessAbstract
Dichotomies between privacy attitudes and behavior have been noted in the literature but not yet fully explained. We apply lessons from the research on behavioral economics to understand the individual decision making process with respect to privacy in electronic commerce. We show that it is unrealistic to expectindividual rationality in this context. Models of self-control problems and immediate gratification offer more realistic descriptions of the decision process and are more consistent with currently available data. In particular, we show why individuals who may genuinely want to protect their privacy might not do so because of psychological distortions well documented in the behavioral literature; we show that these distortions may affect not only 'naive' individuals but also 'sophisticated' ones; and we prove that this may occur also when individuals perceive the risks from not protecting their privacy as significant.
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The privacy paradox is a discrepancy between users' expressed privacy concerns and their actual behavior, in which users claim to be seriously concerned about privacy but do very little to protect their personal data.
“When it comes to privacy-related online behaviors, various researchers have drawn attention to the so-called 'privacy paradox', which refers to a discrepancy between users' attitude towards privacy and their actual behavior.Users claim to be seriously concerned about their privacy but in fact do very little to protect their personal data (Acquisti, 2004;Barnes, 2006).”
From Putting the privacy paradox to the test: Online privacy and security behaviors among users with technical knowledge, privacy awareness, and financial resources (2019) · cites this paper as Acquisti, 2004
Users claim to be very concerned about their privacy but do very little to protect their personal data (the privacy paradox).
“While users claim to be very concerned about their privacy, they nevertheless undertake very little to protect their personal data.”
From The privacy paradox – investigating discrepancies between expressed privacy concerns and actual online behavior – a systematic literature review (2017) · cites this paper as Acquisti, 2004
As a result, the costs of adequate risk assessment can be perceived as unacceptably high leading individuals to rely on simple heuristics.
“As a result, the costs of adequate risk assessment can be perceived as unacceptably high leading individuals to rely on simple heuristics (Acquisti, 2004).”
From The privacy paradox – investigating discrepancies between expressed privacy concerns and actual online behavior – a systematic literature review (2017) · cites this paper as Acquisti, 2004
Individuals tend to underestimate their own risk of privacy invasion while overestimating the chances that others will experience adverse events.
“Individuals tend to underestimate their own risk of privacy invasion while overestimating the chances that others will experience adverse events.”
From The privacy paradox – investigating discrepancies between expressed privacy concerns and actual online behavior – a systematic literature review (2017) · cites this paper as Acquisti, 2004
Individuals tend to heavily discount the low probability of high future risks, resulting in a preference for almost instantaneous benefits.
“Thus, individuals tend to heavily discount the low probability of high future risks (e.g.identity theft), resulting in a preference for almost instantaneous benefits (Acquisti, 2004;Acquisti and Grossklags, 2005;Deuker, 2010;Flender and Müller, 2012;Hughes-Roberts, 2013).”
From The privacy paradox – investigating discrepancies between expressed privacy concerns and actual online behavior – a systematic literature review (2017) · cites this paper as Acquisti, 2004
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Information revelation and privacy in online social networks
Gross, R., & Acquisti, A. (2005) · Proceedings of the 2005 ACM workshop on Privacy in the electronic society · doi:10.1145/1102199.1102214 · Cited by 2,028 · see citing works
Self-citationImagined Communities: Awareness, Information Sharing, and Privacy on the Facebook
Acquisti, A., & Gross, R. (2006) · Lecture Notes in Computer Science · doi:10.1007/11957454_3 · Cited by 1,895 · see citing works
Self-citationPrivacy and human behavior in the age of information
Acquisti, A., Brandimarte, L., & Loewenstein, G. (2015) · Science · doi:10.1126/science.aaa1465 · Cited by 1,879 · see citing works
Self-citationKokolakis, S. (2017) · Computers & Security · doi:10.1016/j.cose.2015.07.002 · Cited by 1,229 · see citing works
Privacy and rationality in individual decision making
Acquisti, A., & Grossklags, J. (2005) · IEEE Security and Privacy Magazine · doi:10.1109/msp.2005.22 · Cited by 1,123 · see citing works
Self-citationFelt, A. P., Ha, E., Egelman, S., Haney, A., Chin, E., & Wagner, D. (2012) · Proceedings of the Eighth Symposium on Usable Privacy and Security · doi:10.1145/2335356.2335360 · Cited by 983 · see citing works
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“As a result, the costs of adequate risk assessment can be perceived as unacceptably high leading individuals to rely on simple heuristics (Acquisti, 2004).”
BackgroundInfluentialStrangers on a Plane: Context-Dependent Willingness to Divulge Sensitive Information
John, L. K., Acquisti, A., & Loewenstein, G. (2011) · Journal of Consumer Research · doi:10.1086/656423 · Cited by 414 · see citing works
Self-citationKehr, F., Kowatsch, T., Wentzel, D., & Fleisch, E. (2015) · Information Systems Journal · doi:10.1111/isj.12062 · Cited by 410 · see citing works
Barth, S., de Jong, M. D. T., Junger, M., Hartel, P. H., & Roppelt, J. C. (2019) · Telematics and Informatics · doi:10.1016/j.tele.2019.03.003 · Cited by 219 · see citing works
The Debate on the Moral Responsibilities of Online Service Providers
Taddeo, M., & Floridi, L. (2016) · Science and Engineering Ethics · doi:10.1007/s11948-015-9734-1 · Cited by 141 · see citing works
Choice Architecture and Smartphone Privacy: There’s a Price for That
Egelman, S., Felt, A. P., & Wagner, D. (2013) · The Economics of Information Security and Privacy · doi:10.1007/978-3-642-39498-0_10 · Cited by 131 · see citing works
How Artificial Intelligence Constrains the Human Experience
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Privacy is the Boring Bit: User Perceptions and Behaviour in the Internet-of-Things
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Uses and gratifications of photo sharing on Instagram
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FlashPolling privacy: the discrepancy of intention and action in location-based poll participation
Poikela, M., Schmidt, R., Wechsung, I., & Möller, S. (2015) · Proceedings of the 2015 ACM International Joint Conference on Pervasive and Ubiquitous Computing and Proceedings of the 2015 ACM International Symposium on Wearable Computers - UbiComp '15 · doi:10.1145/2800835.2804402 · Cited by 7 · see citing works
- Authors
- Acquisti, A.
- Affiliations
- Carnegie Mellon University (US)
- Corresponding author
- Acquisti, Alessandro
- ORCID
- Acquisti, Alessandro
- Venue
- Proceedings of the 5th ACM conference on Electronic commerce
- Publisher
- ACM
- Published
- 2004-05-17
- Pages
- 21-29
- OpenAlex
- W1971219113
- Cited by
- 561
- References
- 2
- Citations by year
- 2026: 4 · 2025: 21 · 2024: 20 · 2023: 27 · 2022: 65 · 2021: 36 · 2020: 28 · 2019: 27 · 2018: 27 · 2017: 29 · 2016: 23 · 2015: 36 · 2014: 29 · 2013: 39 · 2012: 22
- FWCI
- 24.84
- Type
- conference paper
- Language
- en
- Open access
- green
- figshare.com
- Locations
- ACM Conference on Electronic Commerce (EC) (publishedVersion)
- Figshare (submittedVersion, cc-by)
- KiltHub Repository
- Funders
- Carnegie Mellon University
- Topics
- Social Sciences › Sociology and Political Science › Privacy, Security, and Data Protection
- Social Sciences › Decision Sciences › General Decision Sciences › Decision-Making and Behavioral Economics
- Physical Sciences › Computer Science › Information Systems › Information and Cyber Security
- Keywords
- privacy, e-commerce, instant gratification, self-control, behavioral economics, individual rationality, psychological biases
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