Consumer Privacy Concerns and Preference for Degree of Regulatory Control

Abstract

This study explores the consequences of consumers' privacy concerns in the context of mobile advertising. Drawing on social contract theory, the proposed research model connects a series of psychological factors (prior negative experience, information privacy concerns, perceived ubiquity, trust, and perceived risk) and preference for degree of regulatory control. Data from a survey of 510 mobile phone users in Japan show that mobile users with prior negative experiences with information disclosure possess elevated privacy concerns and perceive stronger risk, which leads them to prefer stricter regulatory controls in mobile advertising. Both perceived ubiquity and sensitivity of the information request further the negative impact of privacy concerns on trust. No such effect occurs for the impact of privacy concerns on perceived risk, however. The authors discuss some theoretical and managerial implications.