Philip Ellis
News & Views
What people say about privacy, and what they mean

Privacy matters to consumers — but pizza matters more. In a recent study entitled The Digital Privacy Paradox: Small Money, Small Costs, Small Talk, researchers found that the smallest incentives, like free pizza, were enough to prompt otherwise savvy MIT students to relinquish their personal data.

The authors of the paper, Susan Athey, Christian Catalini and Catherine Tucker, explored how “notice and choice” can limit the ability of consumers to safeguard their own privacy. “Notice” gives consumers information about data collection and use, and “choice” informs them on whether or not to allow their data to be used in such a way. The report highlights a stark disconnect between what people say about data privacy, and how they actually behave in day-to-day life.

The study uses data from MIT’s digital currency experiment, where every undergraduate student at MIT was offered $100 worth of Bitcoin, and had to make three digital privacy choices: whether or not to disclose the contact details of their friends, whether or not to maximise the privacy of their transactions from government and commercial bodies, and whether or not to take additional measures to protect their privacy.

“In all of these cases, privacy-decreasing decisions take place regardless of stated preferences for privacy,” write Athey, Catalini and Tucker. For instance; when offered free pizza, many students were willing to provide the email addresses of their friends, despite having previously stated they would not.

The study also found that “small frictions in navigation costs surrounding privacy choices can have large effects in terms of technology adoption, even in the presence of transparent information about the privacy consequences of those choices.” In other words, if an experience is more secure, but to the detriment of its seamlessness and ease of use, consumers become frustrated and more likely to pursue less safe alternatives.

There is a divide, then, between our “stated preference” and our “revealed preference.” Athey, Catalini and Tucker speculate that the revealed preference is much closer to the norm. “Our results highlight a digital privacy paradox,” concludes the report. “Consumers say they care about privacy, but at multiple points in the process end up making choices that are inconsistent with their stated preferences.”

Small incentives, costs, or misdirection can lead people to safeguard their data less. This has two possible implications; firstly, that policy makers should question the validity of stated privacy preferences, or secondly, that more rigorous protections should be put in place, in order to shield consumers from their own willingness to give away data in exchange for relatively small, short-term gains.

One important takeaway for UX designers is that whenever privacy requires additional effort on the part of the consumer, or interrupts a smooth user experience, they are quick to abandon that technology, even if it offers them the greatest protection. If human beings are “predictably irrational,” as behavioural economist Richard Thaler believes, then it falls to policy makers, designers and advertisers to nudge consumers in the right direction.

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