Academic SeminarAn Empirical Examination of Voluntary Profiling: Privacy and Quid Pro Quo
- 2019-05-09 ~ 2019-05-09
- Supex Building, Lecture Room 101
- School of Management Engineering
We would like to invite you to participate in Management Engineering(ME) Seminar.
1. When: May 9th (Thursday), 16:00~17:20
2. Where: Supex Building, Lecture Room 101
3. Speaker: Prof. Byungwan Koh (Korea University)
4. Topic: An Empirical Examination of Voluntary Profiling: Privacy and Quid Pro Quo
5. Research field: IT Management
* Lecture will be delivered in Korean.
* Seminar materials: Abstract
Anecdotal and empirical evidence suggests that firms which use customer data analytics perform better than those that do not. However, current voluntary profiling policy allows firms to collect and use customer information only if customers voluntarily disclose information with them. Further, surveys and literature show that many customers are not comfortable with firms collecting their information due to privacy concerns. A vast literature has examined customer information disclosing behavior using the privacy calculus. The primary premise of the privacy calculus is that despite strong privacy concerns customers would disclose information if the benefits they can get from disclosure justify the costs of losing privacy, or privacy costs. Based on privacy calculus, firms and marketers have embraced the belief that customers disclose information in exchange for monetary benefits such as discount coupons or cash rewards. Using the transaction data that we collected from a firm that sells skin care cosmetic products on its website, we investigate if there is statistical evidence to support the firms’ and marketers’ belief that customers are willing to disclose information in exchange for monetary benefits. In line with the privacy calculus, we find that customers with low privacy costs and that expect benefits such as personalized services and product recommendations are more likely to disclose information. Monetary incentives may work as an effective means to elicit information but only from younger customers. Customers, on average, and especially older customers are not likely to disclose information simply as a tradeoff for monetary benefits. Thus, personalized services outweigh monetary benefits in enticing customers to disclose information.