The Customer Economics of Internet Privacy

Abstract

The World Wide Web has significantly reduced the costs of obtaining information about individuals, resulting in a widespread perception by consumers that their privacy is being eroded. The conventional wisdom among the technological cognoscenti seems to be that privacy will continue to erode, until it essentially disappears. The authors use a simple economic model to explore this conventional wisdom, under the assumption that there is no government intervention and privacy is left to free-market forces. They find support for the assertion that, under those conditions, the amount of privacy will decline over time and that privacy will be increasingly expensive to maintain. The authors conclude that a market for privacy will emerge, enabling customers to purchase a certain degree of privacy, no matter how easy it becomes for companies to obtain information, but the overall amount of privacy and privacy-based customer utility will continue to erode.

E-mail advertising: A study of consumer attitude toward e-mail advertising among Indian users

“…Privacy refers to the degree to which personal information is not known by others ( Rust et al , 2002 ). Customer privacy has always been a critical issue in marketing, but has assumed a greater signifi cance in recent years with the rise of Internet-based commercial transactions ( Rust et al , 2002 ).…”

“…Customer privacy has always been a critical issue in marketing, but has assumed a greater signifi cance in recent years with the rise of Internet-based commercial transactions ( Rust et al , 2002 ). Moreover, advertising via electronic communications media, such as telephone, fax or e-mail is prohibited by law in several Western European countries unless the consumer agrees explicitly to receive the message.…”

Dimensions of Internet Commerce Trust

“…Of course, many previous studies have linked such issues (Hine & Eve, 1998;Benassi, 1999;Milne & Boza, 1999;Rust, Kannan & Peng, 2002); however, this study is the first to bring forth communication viability as an overarching factor in ICT. The Internet allows for consumer evaluations of privacy, security, and control that, just a few years ago, may have seemed nonsensical.…”

“…Every aspect of Internet consumption, including communications, transactions, and even terms of delivery, is moderated by an omnipresent trust of the media context itself. Further, this form of contextual trust in the Internet encompasses issues of risk, reliability, privacy, and security, as well as perceptions related to control of information (Rust, Kannan & Peng, 2002). …”

Mobile Internet and User Happiness

“…As the users, usage, and number of Smartphone applications grow rapidly, the security and privacy become serious issues to users, such as leaking of personal information or insufficient protection of the transmission of information to support financial transactions [12], [13]. Even users could find iPhone apps to crack the password of WEP (Wired Equivalent Privacy) or WPA (Wi-Fi Protected Access), which created significant threat to the iPhone users.…”