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The Empirical Implications of Privacy-Aware Choice

Author

Listed:
  • Rachel Cummings

    (Department of Computing and Mathematical Sciences, California Institute of Technology, Pasadena, California 91125)

  • Federico Echenique

    (Division of the Humanities and Social Sciences, California Institute of Technology, Pasadena, California 91125)

  • Adam Wierman

    (Department of Computing and Mathematical Sciences, California Institute of Technology, Pasadena, California 91125)

Abstract

This paper initiates the study of the testable implications of choice data in settings where agents have privacy preferences. We adapt the standard conceptualization of consumer choice theory to a situation where the consumer is aware of, and has preferences over, the information revealed by her choices. The main message of the paper is that little can be inferred about consumers’ preferences once we introduce the possibility that the consumer has concerns about privacy. This holds even when consumers’ privacy preferences are assumed to be monotonic and separable. This motivates the consideration of stronger assumptions and, to that end, we introduce an additive model for privacy preferences that has testable implications.

Suggested Citation

  • Rachel Cummings & Federico Echenique & Adam Wierman, 2016. "The Empirical Implications of Privacy-Aware Choice," Operations Research, INFORMS, vol. 64(1), pages 67-78, February.
    • Handle: RePEc:inm:oropre:v:64:y:2016:i:1:p:67-78
    DOI: 10.1287/opre.2015.1458
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    References listed on IDEAS

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    Cited by:

    1. Gradwohl, Ronen & Smorodinsky, Rann, 2017. "Perception games and privacy," Games and Economic Behavior, Elsevier, vol. 104(C), pages 293-308.

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    Keywords

    privacy; revealed preference;

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