PRIVACY ASSURANCE AND NETWORK EFFECTS IN THE ADOPTION OF LOCATION-BASED SERVICES: AN IPHONE EXPERIMENT

The use of geospatially aware mobile devices and applications is increasing, along with the potential for the unethical use of personal location information. For example, iPhone apps often ask users if they can collect location data in order to make the program more useful. The purpose of this research is to empirically examine the significance of this new and increasingly relevant privacy dimension. Through a simulation experiment, we examine how the assurance of location information privacy (as well as mobile app quality and network size) influences users\u27 perceptions of location privacy risk and the utility associated with the app which, in turn, affects their adoption intentions and willingness-to-pay for the app. The results indicate that location privacy assurance is of great concern and that assurance is particularly important when the app’s network size is low or if its quality cannot be verified