It’s now or never! Future discounting in the application of the online privacy calculus

Abstract

Many people engage in extensive use of networked digital systems despite concerns over their privacy, a phenomenon called the “online privacy paradox.” Although privacy calculus research has argued that the benefits of usage usually outweigh the expected privacy losses, it is unclear why people come to this conclusion. We argue that users treat decisions about digital media use as intertemporal choices; that is, they mentally shift into the future the potential damage connected with risk-taking while being convinced of the immediate enjoyment of the benefits of technology use. An online survey conducted among German users for three use cases—e-commerce, online political participation, and self-tracking—indicated that users expect benefits to materialize earlier than associated costs and that the earlier the benefits occur, the higher the amount of benefits users expect. The expected time of the occurrence of benefits and risks explains digital media use in addition to cost–benefit calculations, suggesting a time-discounting bias.