UNCERTAINTY, IDENTIFICATION, AND PRIVACY: EXPERIMENTS IN INDIVIDUAL DECISION-MAKING

ii The alleged privacy paradox states that individuals report high values for personal privacy, while at the same time report behavior that contradicts a high privacy value. This is a misconception. Reported privacy behaviors can be explained by asymmetric subjective beliefs. Beliefs may or may not be uncertain, and non-neutral attitudes towards uncertainty are not necessary to explain behavior. The major objective of the research proposed here is to identify attitudes towards uncertainty and replicate reported privacy behaviors in a controlled laboratory environment. This research would be conducted in three related parts. Part One proposes two experiments in individual decision making. The first seeks to identify attitudes towards uncertainty using an experimental replication of Ellsberg’s canonical 2-color choice problem. The second proposes to test Smith’s conjecture that Ellsberg’s hypothesized preferences are observable when an ambiguous lottery is replaced by a compound objective lottery. The literature has presented evidence tha