Paying to Avoid the Spotlight

In the digital age, privacy in economic activities is increasingly threatened. In considering policies to address this threat, it is useful to consider what value, if any, people attach to privacy in their economic activities. This valuation may be influenced by a mixture of concerns including the desire for personal autonomy, concerns about the exposure of confidential information, and the risk of reputational damage due to dishonest or stigmatized behavior. Our focus is primarily on reputational concerns as we assess individuals’ willingness to pay (WTP) to avoid scrutiny of their potentially dishonest behavior in a simple coin flipping task. We gather and analyze data from Japan, China, and the U.S.A. to determine if there are notable differences across these nations in WTP. Our findings reveal that people’s WTP to “avoid the spotlight” is positive and economically sizable across all three countries and is the largest in Japan.