Management Information Systems Quarterly
Abstract
“Notice and choice” is a mainstay of policies designed to safeguard consumer privacy. This paper investigates distortions in consumer behavior when faced with notice and choice, which may limit the ability of consumers to safeguard their privacy. We used data derived from a field experiment at MIT that distributed a new product, Bitcoin, to all 4,494 undergraduate students. There are two primary findings. First, small navigation costs have a tangible effect on how privacy-protective consumers’ choices are, often in sharp contrast with individual stated preferences about privacy. Second, the introduction of irrelevant but reassuring information about privacy protection makes consumers less likely to avoid surveillance, regardless of their stated preferences toward privacy.