The Effects of Default Privacy Choices on Consumer Welfare

Last registered on February 14, 2022
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Pre-Trial

Trial Information

General Information

Title
The Effects of Default Privacy Choices on Consumer Welfare
RCT ID
AEARCTR-0008943
Initial registration date
February 09, 2022

Initial registration date is when the trial was registered.

It corresponds to when the registration was submitted to the Registry to be reviewed for publication.

First published
February 14, 2022, 12:13 PM EST

First published corresponds to when the trial was first made public on the Registry after being reviewed.

Locations

Country
United States of America
Region

Primary Investigator

Name
Tesary Lin
Affiliation
Boston University
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Other Primary Investigator(s)

PI Name
Avner Strulov-Shlain
PI Affiliation
The University of Chicago
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Additional Trial Information

Status
In development
Start date
2022-02-11
End date
2022-04-15
Keywords
Behavior, Welfare
Additional Keywords
JEL code(s)
Secondary IDs
Prior work
This trial does not extend or rely on any prior RCTs.
Abstract
Are revealed preferences the “true” preferences for privacy when consumers’ privacy valuations are influenced by the default frame? Should policymakers ask companies to seek consumers’ informed consent for data processing under an opt-in, opt-out, or forced-choice frame? We seek to answer these questions using a large-scale online experiment that solicit revealed preferences for consumers’ social media data under different decision frames.
External Link(s)

Registration Citation

Citation
Lin, Tesary and Avner Strulov-Shlain. 2022. "The Effects of Default Privacy Choices on Consumer Welfare." AEA RCT Registry. February 14. https://doi.org/10.1257/rct.8943-1.0
Sponsors & Partners

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Experimental Details

Interventions

Intervention(s)
Intervention Start Date
2022-02-11
Intervention End Date
2022-04-15

Primary Outcomes

Primary Outcomes (end points)
Our primary outcome of interest is participants' valuations for their Facebook profile data, and how this valuation differ across default frames.

We also want to understand the heterogeneity of privacy valuations to compare the welfare effects of default frames. Intuitively, active choice is preferred when privacy preferences are heterogeneous. We plan to focus on the following consumer characteristics when examining preference heterogeneity: demographics, digital literacy, frequency of social media usage, frequency of encountering privacy choices, daily leisure time spent online, time spent and the information sought during the MPL.
Primary Outcomes (explanation)
Digital literacy scores will be constructed based on participants' answer to objective questions on the data market.

Secondary Outcomes

Secondary Outcomes (end points)
We will also measure consumers' stated preference for the choice simplification tools (browser plugins).
Secondary Outcomes (explanation)
The secondary outcome variable will be used to corroborate with the objective costs mentioned above and conveys the economic value of the information processing costs. We consider it to be a secondary outcome because consumers valuation for these tools may also reflect other factors (e.g. the perceived nuisance costs of using these tools).

If the stated valuation for the choice simplification tool has high fidelity (e.g. if it correlates well with objective information processing costs, and if the responses to the questions that solicit the tool valuation are highly consistent), we will turn it into one of the primary outcomes.

Experimental Design

Experimental Design
We randomize participants into different treatments that represent different default interface designs. We then collect participants' valuation for their personal data and time spent in making the decision under each treatment.
Experimental Design Details
The experiment adopts a factorial design, with the following treatment layers.

Layer 1: default option in the MPL: {Yes (opt-out), No (opt-in), unspecified (forced choice)}
Layer 2: price range in the MPL: {0-50, 50-100}
Layer 3: length of behavioral variables asked: in the last {1 month, 12 months, since you joined}

We randomize participants into one of the treatments. Within each treatment, we ask participants their valuation for each of the following Facebook profile variables: about me, past posts, past likes, friends & followers, responses to the survey, first via a multiple-price list, then through a numeric text box.

- For the variable friends & followers: the time frame is always "since you joined"
Randomization Method
The randomization will be done by a computer.
Randomization Unit
individual
Was the treatment clustered?
No

Experiment Characteristics

Sample size: planned number of clusters
The number of clusters is the same as the number of individuals enrolled in the study.
Sample size: planned number of observations
5000 individuals planned, but will depend on how many actually get enrolled.
Sample size (or number of clusters) by treatment arms
We expect a balanced number of individuals across treatment arms.
Minimum detectable effect size for main outcomes (accounting for sample design and clustering)
Supporting Documents and Materials
IRB

Institutional Review Boards (IRBs)

IRB Name
The University of Chicago Social & Behavioral Sciences Institutional Review Board
IRB Approval Date
2021-09-29
IRB Approval Number
IRB21-1376
IRB Name
Boston University Charles River Campus Institutional Review Board
IRB Approval Date
2021-09-29
IRB Approval Number
6239X
Analysis Plan

Post-Trial

Post Trial Information

Study Withdrawal

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Intervention

Is the intervention completed?
No
Data Collection Complete
Data Publication

Data Publication

Is public data available?
No

Program Files

Program Files
Reports, Papers & Other Materials

Relevant Paper(s)

Reports & Other Materials