Privacy Calculus Revisited

Abstract

The use of online services, in most cases, requires the disclosure of some personal data. At the same time, online data disclosure has been shown to trigger privacy concerns. The “privacy calculus” states that Internet users are willing to overcome privacy concerns and disclose personal data online if the ensuing transaction provides a sufficient benefit. Yet, little is known about the relationship between online self-disclosure and perceived service benefit. We propose that this relationship is curvilinear in nature, with increasing levels of self-disclosure allowing for increasing platform engagement and enjoyment, but also increasing privacy concerns, which at some point outweigh the marginal benefit of further self-disclosure. As different services require varying levels of self-disclosure and provide different benefits, we propose that the form of this curvilinear relationship is dependent upon the business model context of a service. We test these propositions based on a survey of 1’044 Internet users by analyzing self-disclosure in the context of online shopping and social networking site services. We find that actual self-disclosure behavior deviates from the patterns implied by a rational maximization of service benefits, resulting in a “privacy calculus paradox”.