Disclosure of Personal Information Under Risk of Privacy Shocks

Individuals disclose an increasing amount of personal information when buying goods or services. Personal details are revealed despite the rising threat of privacy breaches at firms that collect the information. Yet, we know surprisingly little about the trade-offs individuals consider when disclosing personal information in economic transactions. We present this problem as a dynamic lottery with personal information under the risk of privacy shocks. We explore how the notification about a privacy breach changes an individual's behavior with regard to disclosing personal information. This paper describes our experimental design as well preliminary theoretical predictions