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The digital privacy paradox

Abstract

Over the past 10 years, numerous scandals involving personal data shocked the world. In 2013, the whistle blower Edward Snowden came forward and disclosed various worldwide government surveillance programs (Jill Lepore, 2019). In 2018 the Cambridge Analytica scandal erupted, revealing that the so-called behavior changing agency had without consent harvested the personal data of millions of people’s Facebook profiles and used it for political advertising purposes (Steve Andriole, 2019). In early 2020, the Norwegian Consumer Council released an alarming report, that revealed that 10 dating apps, among them Tinder and Grindr, had collected and sold sensitive consumer data to over 135 companies. The data includes information about sexual orientation, political beliefs and drug usage (City Am, 2020). Those and other distressing revelations made consumers worldwide more aware of the value and misusage of their personal data. Despite the newfound awareness, consumers make little to no change to their online behavior and keep using applications that have been proven to invade their privacy. This inconstancy between the consumer privacy concerns and their behavior online is known as Digital Privacy Paradox (Spyros Kokolakis, 2015). The Rational Choice Theory is suggesting that individuals make reasonable and logical decisions in order to create the greatest benefit or satisfaction (Susanne Barth, Menno D.T. de Jong 2017). However, to explain the paradoxical online consumer behavior solely with this theory is over simplified, insufficient and does not lead to a substantially better understanding. The Rational Choice Approach is lacking in the necessary incorporation of emotional and of behavioral aspects. Online and offline, many actions are driven by irrational affective factors. This irrational online behavior is caused by faulty estimation of risks and potential threats. Consumer risk assessment is strongly influenced by benefit and emotional biases (Christoph Lutz, PePe Strathoff, 2014). Even though, there has been extensive research to proof the existents of the Digital Privacy Paradox, it is a complex phenomenon and a very current subject that requires further research. The aim of this work is to gain an improved understanding of the complex paradox by gathering existing information and by conducting a survey experiment. Further, to offer solutions on how tech giants and social media companies can address the privacy concerns of consumers and (re)built trust, while keep being able to personalize their products and gain valuable marketing insides.

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