A construal level theory approach to privacy protection: The conjoint impact of benefits and risks of information disclosure

Abstract

To stand out from the competition, companies collect massive amounts of personal information, which they use to create memorable and personalized customer experiences. At the same time, they face increasing regulatory pressures to inform these customers of the way their personal data are collected and used. To reach acceptable levels of transparency in marketplace interactions, companies thus now need to communicate both the benefits and the risks associated with the disclosure of personal information. An explicit mention of these risks, however, may exert a negative impact on the amount of personal information that consumers agree to disclose. Using a construal-level theoretical lens, this research explores how companies can address this transparency trade-off and tests communication strategies they can use to overcome it. Findings show that companies’ framings of the benefits and risks of sharing information affect disclosures, leading consumers to share more personal data than their privacy preferences would suggest. Three experiments confirm that when consumers are exposed to concrete (vs. abstract) privacy risks, they perceive personal questions as more sensitive (Study 1) and are less likely to reveal personal information (Study 2). However, when exposed to privacy protection statements (rather than privacy risks per se), consumers reveal more information if those statements are concrete (Study 3). The studies also reveal an interaction effect between the benefits and risks of sharing information, such that the abstraction level of risks influences information disclosure only if the benefits of disclosure are concrete. Consumers’ feelings of vulnerability also act as a mediating variable, in support of the relevance of construal level theory for explaining information disclosure processes.