Carnegie Mellon University

Paying for Privacy

07-13-2011

Online Consumers Willing To Pay for Privacy

A new study by Carnegie Mellon researchers debunks the conventional wisdom that online consumers won't pay a premium to purchase from vendors with clear, protective privacy policies.

The study, authored by CMU researchers Janice Y. Tsai, Serge Egelman, Lorrie Cranor and Alessandro Acquisti, appears in the current issue of the INFORMS journal Information Systems Research.

"Our study indicates that when privacy information is made more salient and accessible, some consumers are willing to pay a premium to purchase from privacy protective websites," write the authors.

The researchers note that most online privacy policies are difficult for consumers to use and are often overlooked. Challenging a predominant belief that consumers would not sacrifice for greater Internet privacy, they designed their research to determine if consumers would pay extra to make a purchase at an online store whose privacy policy was medium to high and could easily be determined.

When shopping online for batteries, participants in one phase of the study made significantly more purchases from sites rated "high privacy" (47.4 percent) than participants buying from sites rated "no privacy" (5.6 percent).

To learn more about the study, check out the podcast interview with study co-author Acquisti here: http://www.scienceofbetter.org/podcast/acquisti.html

Ken Walters