A study presented today at Carnegie Mellon University's Workshop on the Economics of Information Security suggests that Web users are more willing to purchase from online businesses that offer strong privacy protections and that they are willing to pay a premium for privacy protection.
These findings challenge the conventional wisdom that Web users do not make buying decisions based on privacy concerns and, in fact, that Web users willingly surrender personal information in exchange for very little in return.
According to the authors of The Effect of Online Privacy Information in Purchasing Behavior: An Experimental Study, Web users seem not to value privacy because Web site privacy information is not being conveyed to them in a meaningful way. Privacy policies, the study's authors contend, are "invisible" to Web users: they are rarely read, they are difficult to comprehend when read, and most users mistakenly believe that the presence of a privacy policy means that their personal information is protected.
The study put privacy information front-and-center through the use of a technology called PrivacyFinder, a tool that processes a Web site's Platform for Privacy Preferences (P3P information) and presents the information in an easy-to-read "privacy meter" graphic. Survey participants, when presented with privacy information in this format, "tend[ed] to purchase from online retailers who better protect their privacy."
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