Privacy Is Precious: On the Attempt to Lift Anonymity on the Internet to Increase Revenue
Privacy Is Precious: On the Attempt to Lift Anonymity on the Internet to Increase Revenue
We investigate the effect of a reduction of anonymity on consumers' purchase decisions (whether to buy, and if so how much to pay) at an online music store with Pay-What-You-Want (PWYW)-like pricing and in an Internet experiment mimicking the real world situation. Revealing the customer's name, e-mail, and payment to the artist (seller) led to insignificantly higher payments, although it drastically reduced the number of customers purchasing. Overall, the regime led to a revenue loss of 25%. In the online experiment, revenue drops by 35%. These results suggest that the positive effect of reduced anonymity, previously established for donation or public goods contexts, does not extend to a consumption environment. Instead, the substantial opt-out of customers is likely to be motivated by concerns about privacy.
318-336
Regner, Tobias
234c21db-0664-44d9-a188-0d94b5e371da
Riener, Gerhard
8e8e27a6-4931-4e70-b223-688f3fd616c1
1 June 2017
Regner, Tobias
234c21db-0664-44d9-a188-0d94b5e371da
Riener, Gerhard
8e8e27a6-4931-4e70-b223-688f3fd616c1
Regner, Tobias and Riener, Gerhard
(2017)
Privacy Is Precious: On the Attempt to Lift Anonymity on the Internet to Increase Revenue.
Journal of Economics and Management Strategy, 26 (2), .
(doi:10.1111/jems.12192).
Abstract
We investigate the effect of a reduction of anonymity on consumers' purchase decisions (whether to buy, and if so how much to pay) at an online music store with Pay-What-You-Want (PWYW)-like pricing and in an Internet experiment mimicking the real world situation. Revealing the customer's name, e-mail, and payment to the artist (seller) led to insignificantly higher payments, although it drastically reduced the number of customers purchasing. Overall, the regime led to a revenue loss of 25%. In the online experiment, revenue drops by 35%. These results suggest that the positive effect of reduced anonymity, previously established for donation or public goods contexts, does not extend to a consumption environment. Instead, the substantial opt-out of customers is likely to be motivated by concerns about privacy.
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Published date: 1 June 2017
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© 2017 Wiley Periodicals, Inc.
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Local EPrints ID: 480843
URI: http://eprints.soton.ac.uk/id/eprint/480843
ISSN: 1058-6407
PURE UUID: 197b3075-ef38-4f59-a670-5de41525968c
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Date deposited: 10 Aug 2023 16:37
Last modified: 17 Mar 2024 04:18
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Author:
Tobias Regner
Author:
Gerhard Riener
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