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BLOG: When it comes to privacy, we’re all just a little bit nuts

Dan Tynan | April 2, 2013
Is your personal information worth more than the price of a cup of coffee? Yes and no.

Would you pay $2 to protect your privacy? You might, or you might not. It all depends largely on how the question is framed.

That's one conclusion of research performed by Alessandro Acquisti, a professor of behavioral economics at Carnegie Mellon who's focused a lot of his work on how people value their personal information. The New York Times ran a nice profile of Acquisti over the weekend that dives into some of his research.

Much of Acquisti's work charts the often irrational trade-offs we make each day, whether it's giving up personal information for the price of a cup of coffee or admitting to cheating on tests. It turns out students are less likely to be honest about their cheatin' arts if they know their teachers might see the results, even if they know their identities will not be revealed. But they are less careful about it if they are distracted by something else at the moment the question is asked.

For example: Acquisti dispatched graduate students to the mall to ask shoppers two questions. The first question: Would you rather accept a $10 discount card and keep your shopping information private, or take a $12 discount and hand over your data? Half of the shoppers declined to share their personal data.

He then sent researchers to the mall to hand out $12 discount cards. The students offered to trade the $12 card for a $10 one, but promised to keep shopping records private in return for a lesser discount. This time 90 percent of mall goers traded their data for money.

Per the Times:

To Mr. Acquisti, the results offered a window into the tricks our minds can play. If we have something - in this case, ownership of our purchase data - we are more likely to value it. If we don't have it at the outset, we aren't likely to pay extra to acquire it. Context matters.

This is not unlike what the petroleum companies figured out a long time ago when they wanted to pass the cost of credit transactions on to consumers. Instead of marketing it as a credit surcharge, though, they called it a "cash discount." Instead of seeming to take something away from consumers (their money), they gave something back.

And so it is with the debate over privacy. Semantics matter. When someone says "you have no privacy left - get over it," what they mean by the word "privacy" might very well differ from yours. I'm sure Scott McNealy, who made that oft-quoted statement in 1999, values his own privacy a great deal. I'm willing to bet that, unlike the dude from Lifelock, he doesn't publish his social security number on the Internet. It's a pretty safe assumption that when he leaves his house he's wearing pants, or something like them.


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