Examining the privacy paradox through individuals’ neural disposition in e-commerce: An exploratory neuroimaging study

Abstract

Despite individuals expressing concerns for the privacy of their personal information, they act contrarily by disclosing their personal information in e-commerce transactions. This phenomenon of contradictory privacy-related decisions is referred to as the privacy paradox. Researchers have explained privacy paradox as either a rational function resultant of a calculus of costs and benefits, or due to the effects of emotions (affect), psychological deviations and cognitive biases. However, the nature of mental perceptions in privacy have not been properly examined. This study investigates the nature of mental perceptions formed in a given privacy-related situation and their influence on privacy-related decision-making in the context of e-commerce. We argue that individuals’ privacy-related decisions are based on mental perceptions formed during privacy-related situations that are both rational and emotional, as well as, interconnected with one-another. Based on the privacy calculus and the findings of neuroscience, we developed the research model and subsequently evaluated it using two within-subject experiments using an EEG device. The results of the study indicate that individuals’ privacy-related decisions tap into both executive and emotional areas of the brain, which involves assessments of risks and rewards, as well as, emotional regulation.