Working Paper: NBER ID: w28854
Authors: Long Chen; Yadong Huang; Shumiao Ouyang; Wei Xiong
Abstract: A central issue in privacy governance is understanding how users balance their privacy preferences and data sharing to satisfy service demands. We combine survey and behavioral data of a sample of Alipay users to examine how data privacy preferences affect their data sharing with third-party mini-programs on the Alipay platform. We find that there is no relationship between the respondents’ self-stated privacy concerns and their number of data-sharing authorizations, confirming the puzzling data privacy paradox. Instead of attributing this paradox to the respondents’ unreliable survey responses, resignation from active protection of their data privacy, or behavioral factors in making their data-sharing choices, we show that this phenomenon can be explained by a curious finding that users with stronger privacy concerns tend to benefit more from using mini-programs. This positive relationship between privacy concerns and digital demands further suggests that consumers may develop data privacy concerns as a by-product of the process of using digital applications, not because such concerns are innate.
Keywords: data privacy; digital demand; Alipay; data sharing; privacy paradox
JEL Codes: D03; D12; M15
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| privacy concerns (K24) | data sharing behaviors (D16) |
| privacy concerns (K24) | digital demands (R22) |
| stronger privacy concerns (K24) | usage of miniprograms (C88) |
| usage of miniprograms (C88) | data-sharing authorizations (D16) |
| self-stated privacy concerns (D18) | number of data-sharing authorizations (Y10) |
| privacy concerns (K24) | developed preferences (D01) |