Experimentally Elicited Beliefs Explain Privacy Behavior

The privacy literature has recognized a dichotomy between reported values of privacy and actual behavior. People tend to say they value privacy highly, and then behave in ways which seem to contradict these statements. In this experiment, the consequences of privacy loss were controlled using a voluntary contributions mechanism that isolated personal information from the natural world. Elicited values were higher than what has typically been observed in the literature. The evidence does not support a “privacy paradox.” Subjective expected utility maximization explains the dichotomy. Trust and asymmetric beliefs are substantial determinants of (information) values.