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Digital Privacy or Pizza?

A troubling new digital privacy study reveals how our words fail to match our actions

By Dennis Jones


When prompted by pollsters, people usually say that they hold their digital privacy dearest of all. But it seems time and again that studies of actual consumer behavior point up the lie inherent in public polling findings. Most recently, researchers revealed study results showing that greater convenience outranks more privacy as determinative. So what did these researchers test? They examined whether consumers would throw the digital privacy of others (and themselves) overboard for a free pizza. Sounds tasty, so let’s read on.

First of all, what does the polling say? Overwhelmingly, consumers prefer greater legal protections to ensure digital privacy. For instance, recent Pew polling showed that an overwhelming 74 percent of Americans said it was very important to them that they be in control over the people who can get information about them. Sixty-five percent said it was very important to control what information was collected about them. And a whopping 91 percent of adults agreed or strongly agreed that consumers have lost control of how personal information is collected and used by companies.

Yet, the Pew polling also picked up on an interesting wrinkle in the digital privacy debates. Context matters. Indeed, context matters a lot. For consumers who are making decisions about sharing information in return for products and services, the context and the conditions of the transaction matter.

Corroborating these findings, Susan Athey, senior fellow at the Stanford Institute for Economic Policy Research, Christian Catalini and Catherine Tucker, both of MIT, recently released the results of their study of 3,108 undergraduate test subjects. Their subjects were asked to choose an online wallet to store and manage digital currency to measure their privacy preferences.

The wallet was offered with privacy features of varying levels of expressed security. But it was the order in which the wallets were presented to subjects – not the level of security the wallet provided – that ultimately drove decision-making. For instance, 78 percent of respondents chose the wallet with the highest degree of privacy when that wallet was presented first. But when it was listed second or lower, the number slumped to 65 percent. It also didn’t matter if respondents got more information about privacy features. The order that the wallets were presented remained the key factor influencing choice.

Additionally, respondents were given the chance to add an extra layer of encryption as part of the online wallet setup. Only half of the respondents attempted this safer, but more time-consuming setup process. And of those that began only half completed the more secure setup.

The researchers also conducted a test to show how outside influences could affect privacy decisions. They offered a group of students a free pizza. The only catch: the subjects had to disclose the email addresses of three friends. The lion’s share of students coughed up their friends’ email addresses in return for the pizza. Stated privacy preferences (and personal ethics) mattered little.

What should we take away from this study? Well, faced by any frictions or negative incentives, consumers will be detoured away from their own avowed privacy preferences. In the battle between convenience and privacy (or security for that matter,) convenience seems to trump all.