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    New York Times: The Economics of Privacy Pricing

    The New York Times discusses the issue of consumers being paid by companies that want to mine their data for marketing purposes:

    I wrote a Sunday column about a San Francisco start-up that is betting the time has come to make personal information online not only an asset consumers can manage, but also a virtual currency that can be traded someday.

    Others, of course, have tried making a business from trading click streams and other online personal information on behalf of consumers, like Root Market years ago. But part of the start-up Bynamite’s calculation is that these days, the data is far richer and  the technology has matured enough to make such a service easy to use, effective and flexible. More people seem to be concerned about privacy today as well. […]

    A paper by three scholars from Carnegie Mellon University […] does provide some insights from behavioral economics about how people value their personal information, and make money-privacy tradeoffs.

    The paper — “What is privacy worth?” — was presented at a conference at the end of last year and is awaiting publication in a professional journal. Its authors are Alessandro Acquisti, an associate professor in information technology and public policy; Leslie John, a doctoral candidate; and George Loewenstein, a professor of economics and psychology. […]

    What conclusion to draw? “When you have privacy, you value it more,” said Mr. Acquisti. “But when the starting point is that we feel we don’t have privacy, we value privacy far less.”

    So Mr. Acquisti says those experts who say people don’t care about privacy are off-base. Instead, he said, the perception that people place little value on privacy is shaped by their low expectations, which Mr. Acquisti termed the “continual psychological conditioning that we don’t have privacy, that our personal information is widely available and we can’t control that.”

    One Response to “New York Times: The Economics of Privacy Pricing”

    1. Kirk Rangold Says:

      It’s an excellent point! Will people want to keep their privacy if they can be paid to give it up? Of course, each person will answer that question on their own.

      I would like to see the details on how to make the trade-off. How can I keep my information private so that I could sell it in the future? I know there are applications like TrulyMail and PGP which help keep my communications private but how can I ensure that nobody can find out anything about me? The greatest risk, I think, is other publishing information about me without my consent. I would like to prevent this because it would weaken my ‘bargaining position’ should I wish to sell my information later.

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