Privacy and Information Avoidance: An Experiment on Data-Sharing Preferences

There is a widespread intuition that people are inconsistent about protecting their privacy. This paper presents an experiment that demonstrates that people engage in information avoidance when making privacy decisions. People who are willing to pay nearly an hour’s worth of wages for privacy are also willing to give away their data for small monetary bonuses if given a chance to avoid seeing the consequences to privacy. Placebo tests confirm that the same behavior does not occur when people make choices between two monetary bonuses. The paper also presents evidence on how this pattern changed during the Cambridge Analytica scandal