Claudio Feijoo: ¿Somos los internautas miopes, irresponsables e ingenuos?
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¿Somos los internautas irresponsables, miopes e ingenuos? Un examen del valor de la información personal en Internet Debates sobre tendencias de la sociedad de la información UOC Sevilla 12 Mar 2013 Claudio Feijóo Source: indigo-moogle.deviantart.com Contact: [email protected] CeDInt – UPM, Campus de Montegancedo, Pozuelo de Alarcón, 28223 Madrid, Spain
Transcript of Claudio Feijoo: ¿Somos los internautas miopes, irresponsables e ingenuos?
¿Somos los internautas irresponsables, miopes e ingenuos?
Un examen del valor de la información personal en Internet
Debates sobre tendencias de la sociedad de la
información
UOCSevilla
12 Mar 2013
Claudio Feijóo
Source: indigo-moogle.deviantart.com
Contact: [email protected]
CeDInt – UPM, Campus de Montegancedo, Pozuelo de Alarcón, 28223 Madrid, Spain
Personal Information
Overview
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• Background
• Two (economic) visions on the value of personal information
• What we know and what we do not know about the value for
users and providers
• Some conclusions and a discussion on policy options
BACKGROUND – The value of personal information3
Personal Information
Source: fakemillion.com
Source: africatv1.com
The new oil of Internet (Kuneva, 2009)
Gold rush for the big data:
targeted services and
smart everything
BACKGROUNDDigital shadows – Users’ control – Context of transaction
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Personal Information
Data, profiles and personal information are left behind as permanent shadows that question today’s understanding of identity and privacy.
User interactions with people, smart devices, and media spaces can be labelled, tagged, searched and traced…
User awareness & control by means of design, communication, education, regulation, etc.
People’s (data) disembodiment from the context into which they spread information, and the persistence of their digital traces in dissociation from their actions
The fading borders between physical and digital worldfading borders
Out of context
Profiling
The Target case (Greengard, 2012) Qs on use of mobile phone and user consent
RESEARCH QUESTIONS ON PERSONAL INFORMATION5
Whether the use of personal data is creating economic and social value at an
increasingly greater pace is not anymore in question, however …
Which is the economic value of personal information?
How is the value distributed between users, providers and society at large?
How is value evolving and on what depends its evolution?
How the level of privacy protection influences value creation in different
markets
Personal Information
WELFARE EFFECTS•Individuals and organizations face complex and ambiguous trade-offs (Acquisti, 2010).
•Different theoretical models • The futility of personal information protection (neoclassical economists) efficiency is achieved
through a free market, administrative interference introduces distortions and inefficiencies. Privacy costs both for firms and individuals so enforcement of privacy is welfare diminishing (the case of hiring workers). Coase’s theorem applied to privacy rights (Noam, 1997).
• Complexity of consumers’ decisions (behavioural economics). Consumer not rational choices / behavioural biases. Incomplete information, bounded cognitive ability. Little control on secondary usage of data. Negative externalities for unsolicited marketing -> privacy regulation required.
ARE WE INTERNET USERS IRRESPONSIBLE, MIOPIC AND NAÏVE?Overview of welfare economics
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Benefits Concerns
Access to information and sharing it with peers and third parties that makes mutually satisfactory interactions possible
Protect the security of their data and avoid the misuse of information they pass to other entities -> contextual integrity of information
Concerns / Benefits
Do not want to alienate those parties with policies too invasive. Do not want regulation other than self and narrow definition of personal data
Want to know more about the users they interact with, tracking them across transactions
USERS PROVIDERS
WHAT WE KNOW and WHAT WE DO NOT KNOW …Providers and platforms
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Two-sided markets (Rochet & Tirole, 2006) or players with large market power practising first-degree discrimination of its market while using information asymmetries?
Personal Information
Rto current revenue per recordi interest rate T max life time of data record
NPV of Revenues per data record (US$). 2009-2011
Note: estimates are based on an application of the Net Present Value [NPV] method on revenues per data record and rely on ad hoc assumptions concerning the market reference interest rate (exemplary illustrated in the graph for 7%). Moreover, it has been assumed that data have a commercial ‘life time’ of minimum 3 and maximum 7 years (acc. to Experian AR).
Regional differences?
Other sectors?
WHAT WE KNOW and WHAT WE DO NOT KNOW …Users
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People tend to differ with respect to their individual valuation of personal data (i.e. amount of money sufficient for them to give away their personal information) and their individual valuation of privacy (i.e. amount of money they are ready to spent in order to protect their personal data from disclosure).
Empirical studies point out that both the valuation of privacy and the valuation of personal data are extremely sensitive to contextual effects.
Users are not interested in paying in exchange of keeping control of their personal data. However they have a strong negative perception of search providers retaining their data and/or sharing it with third parties. The well-known privacy paradox
Non-rational behaviour: from safe search to twittering away search results
Users prefer free services and react very negatively to increasing prices of the service
Consumers do differentiate between the bounded use of personal information that takes place within the providers business objectives and the largely unkown usage by third parties
Sharing information with third parties is seen as very negative: search history, IP address and email address in a similar level; telephone number and accumulation of data much more negative.
Use of location information more negative than just putting advertisings in the results page
Promotional offers related with search slightly negative
The time information is stored is relevant but not beyond some point.
Personal Information
Regional differences? Other sectors? Evolution over time?
SOME CONCLUSIONS AND POLICY-MAKING DISCUSSION (I)9
Regulation of service providers’ usage of personal information represents a challenge for policy makers, as there is a difficult trade-off to resolve between innovation and user rights.
Reflection on the limits of the use of personal information is not just a theoretical debate but crucial to exploring economic growth opportunities.
Policy considerations largely aligned with improvements in the use of personal information “by design” and “by law”.
Techno-economic developments.
Consumers lack information and tools concerning the preservation of contextual integrity during the flow of personal information. The possibility of managing context with personal information could have a positive impact on the development of new digital services that do not make users resistant in their increasingly convenient digital experiences.
Privacy-enhancing technologies may make it possible to reach equilibria where data holders can still analyse aggregate and anonymised data while subjects’ individual information stays protected.
Portability of personal data is another area that requires development to allow for a competitive offer of targeted services while maintaining levels of competition and sufficiently high quality to avoid consumers’ lock-in effects (peculiar multi-sided market).
Personal Information
SOME CONCLUSIONS AND POLICY-MAKING DISCUSSION (II)10
Evidence gathered suggests that consumers act myopically when trading off the short-term benefits and long-term costs of information revelation and privacy invasion.
Increasing tension for high values of personal information already disclosed to providers.
Under these circumstances, the market equilibrium will tend not to afford privacy protection to individuals, in particular, for the out-of-context use of personal information. Therefore, privacy regulation may be needed to improve consumer and aggregate welfare.
To make convincing arguments, Europe should prove that a privacy-respectful framework increases the chances for innovations and market success based on the value of personal information, not the contrary.
Increasing the awareness of users about their choices regarding personal information: a more heterogeneous population implies a positive effect on social welfare (with user welfare increasing more rapidly than provider welfare decreases); also if users’ reluctance to reveal personal information increases, then the quality of services provided should increase to compensate for the effect and increase demand.
To summarise, further research on users’ behaviour is clearly needed to create a baseline for the evolution of personal information attitudes and include a broad range of sectors and demographics. Thus, to balance users’ concerns and interests, new studies on the privacy attitudes of European citizens should go hand in hand with a more robust understanding of the economics of personal information.
Personal Information
¿Somos los internautas irresponsables, miopes e ingenuos?
Un examen del valor de la información personal en Internet
Debates sobre tendencias de la sociedad de la
información
UOCSevilla
12 Mar 2013
Claudio Feijóo
Source: indigo-moogle.deviantart.com
Contact: [email protected]
CeDInt – UPM, Campus de Montegancedo, Pozuelo de Alarcón, 28223 Madrid, Spain
