Quantifying Privacy Choices with Experimental Economics

The importance of personal privacy to Internet users has been extensively researched using a variety of survey techniques. The limitations of survey research are well-known and exist in part because there are no positive or negative consequences to responses provided by survey participants. Experimental economics is widely accepted by economists and others as an investigative technique that can provide measures of economic choice-making that are substantially more accurate than those provided by surveys. This paper describes our preliminary efforts at applying the techniques of experimental economics to provide a foundation for estimating the values that consumers place on privacy and various forms of security, such as encryption and HIPAA. In the activities described, experiment participants are graduate and undergraduate students currently seeking jobs. Preliminary results from two pilot experiments suggest that a complete set of experimental measures of choice-making will provide valuable quantification of behavior in Internet privacy/security space. These results also show that online job seekers place great value on security measures, both legislative and technical, that make identity theft much less likely. David L. Baumer, Julia B. Earp and J.C. Poindexter College of Management, North Carolina State University, Raleigh, NC 27695-7229 1 [email protected] [email protected] [email protected] Quantifying Privacy Choices with Experimental Economics