Digital Privacy

Participants had to choose between more privacy and cheap movie tickets (less privacy).

A recent study published by researchers from Berlin and Cambridge performed an experiment where ultimately they let consumers choose between providing more information (less privacy) or paying more for a service (more privacy).

The setup was like this: Participants were given the choice to buy movie tickets at two online shops. Shop #1 asked for name, email and birth date. Shop #2 asked for the same information but additionally required the mobile phone number of the participant. For providing the phone number, shop #2 offered the movie ticket for 50 Euro cents less. The obvious choice (for me) would be to provide a fake phone number and pay less. However, this was not possible since phone numbers were checked against the true numbers of the participants.

The result: 71% of customers were willing to provide their phone number to pay 50 cents less for the movie ticket, 29% were willing to pay the premium for more privacy. At first sight this result looks quite shocking. To save just 50 cents people are willing to give up their personal privacy. The study takes a more positive spin in pointing out that 29% of the participants were willing to pay for their privacy.

While 50 cents sounds like a small amount and is good for a nice headline, I believe this should be seen in relation to the ticket price (which isn’t mentioned in the summary). In the long version of the study the ticket price is mentioned: The authors subsidized the ticket so the participant had to pay as little as €3 per piece. This means that people were willing to give up their privacy for a 17% price drop. This does not sound so little anymore and is quite an incentive to give up the phone number. A further contributing factor is that annoying marketing calls are still quite rare in the German region (in Austria at least) where the study was done. So giving up your phone number has little practical implications. I personally probably would have taken the cheaper ticket (yes, call me cheap!).

Link: Study “Monetizing Privacy”
Link: Full study