Risky Data: The Combined Effect of Framing, Trust and Risk Preferences on the Intended Participation in the Consumer Data Right

Abstract

The Consumer Data Right (CDR), which began in Australian on the 1st of July 2019, aims to give Australian customers a right to access data about them held by businesses, and also to share this information with accredited and trusted third parties of their choice. This enhanced flow of information in the economy is designed to benefit consumers by improving their ability to compare and switch between products and services. The policy also aims to increase the effectiveness of relevant markets. In this paper we examine the effects of framing and behavioural preferences on the willingness to use the CDR. This analysis was conducted in two steps. First, we examine the pure effects of loss and gain framing on the willingness to use the CDR. In the second step, we examine the joint effects of framing and trust/behavioural preferences on the decision to use the CDR. We find significant effects for both positive and negative framing (compared to neutral framing) with the effects varying based on the person’s level of trust in government and risk preference. We conclude with implications for this particular policy initiative, as well as with other policy initiatives that involve significant risk of data privacy breaches.