To disclose or not to disclose, that is the question!

Daniel Guerrero

TL;DR After the announcement of WhatsApp on its new terms of use of users’ data, we feel that somehow full transparency of privacy concerns is not always the best strategy to gain credibility. Somehow, this experience is telling us that the less the better.

This may be a consequence of the mistrust generated by social media scandals and its unscrupulous use of information; but there are behavioral arguments that give us a better understanding of this situation. What should we do then? The answer depends on different context claiming the need to experiment with different framings to disentangle this dilemma.

Currently, permissions on WhatsApp are an all-or-nothing consent to use the app and users cannot selectively grant or decline a subset of them. So, users must choose not to install the application to deny any of the requested permissions. This notice generated such a disagreement that the company decided to postpone the implementation of their new policy until May 2021 with some changes on it (BBC, 2021) in order to avoid a mass exodus of users.

With these notices, companies intend to offer guarantees to consumers about their privacy management practices. Ironically, such guarantees may raise more privacy concerns than alleviate them.

Mostly, the research supports the argument that consumers, by knowing exactly what information companies have access to and understanding how it will be processed, feel more comfortable to provide personal data (Milne et al. 2017; Nowak & Phelps 1992,). In industries where privacy notices are not required by law, the fact that a company voluntarily chooses to disclose its data management practices may indicate that it is trustworthy. However, some privacy notices, while designed to promote a sense of confidence that personal information will not be misused, can trigger privacy concerns that were previously inactive.

This phenomenon is called the “bulletproof glass effect” (Brough, 2020), and bases on the idea that a privacy notice works like bulletproof glass every time it is designed for protection; however, its only presence can create a sense of potential danger and, paradoxically, makes consumers feel more vulnerable than they would in its absence.

Although consumer privacy concerns are often context-dependent and unstable in all situations, privacy notices can decrease rather than increase consumer confidence (Acquisti et al. 2015). This has led many smartphone users to worry about their privacy and opt for paid apps that request less access to personal information.

What about consent for marketing communications?

One of the most common business challenges faced by businesses around the world is marketing consent that enables communication with customers. Expilab’s team has conducted several online field and framed-field experiments seeking the ways how to optimise marketing consent without reverting to dark patterns or sludges. Through close cooperation with data governance, legal, privacy champions our team has designed and tested different interventions that aimed to achieve 3 things: provide full legal compliance, keep customer needs and ensure improved business outcomes (e.g. increase of informed marketing communication consent rates). Here is an example from framed-field experiment for one of the largest Insurance Companies in APAC – some of the best behavioural interventions achieved 80% increase in consent rates while keeping the privacy balance

The choice architecture has shown positive results in terms of informed consent and privacy awareness of users (Bergram et al., 2020). Framing agreements differently and providing alternatives of choice can significantly increase the number of users who are aware and read the terms and privacy policy. However, it does not necessarily increase users’ recall of what they agree to or their compliance

Privacy concerns often remain dormant until consumers are asked to think about them (Marreiros et al., 2017). The evasion of consumer information shows that consumers often prefer ignorance to bad news (Sweeny et al. 2010).

These discussions raise a dilemma and make us wonder: How strategic is it to be completely transparent? Possibly the answer to this question is related to the context or industry in which our companies interact. Today, the large supply of information has made consumers more skeptical and demanding and any false move can generate doubts on the clarity of the rules on businesses and the technology use. This may be a consequence of the mistrust generated by social media scandals and its unscrupulous use of information, or perhaps because of the idea that many companies make money with personal data and consumers receive “nothing” in exchange.

What should we do then?  After knowing these arguments, it would be good to ask ourselves: Is the less the best? To provide context specific privacy notices only when privacy related issues even occurs? Being fully transparent with our clients no matter what? Make it easier for them to understand what are the policy concerns? “To protect them” by lowering the information overload? In the meantime, we can only conclude that it’s necessary to test more intervention and experiment with different framings and choice architectures to disentangle this dilemma and contribute to the business ethics.

Let us know what you think!

Video: Highlights of Prof. Uri Gneezy Talk in Barcelona, 2014
April 19, 2014
Andrew Ivchenko

Uri Gneezy is Renown scholar in individual decision-making and behavioral economics fields the Epstein/Atkinson Endowed Chair in Behavioral Economics and Professor of Economics & Strategy at the Rady School of Management, UC San Diego

Incentives for Nothing or Why Behavioral Experiments are Needed? Uri Gneezy talks in Barcelona
April 2, 2014
Andrew Ivchenko

Uri Gneezy is Renown scholar in individual decision-making and behavioral economics fields the Epstein/Atkinson Endowed Chair in Behavioral Economics and Professor of Economics & Strategy at the Rady School of Management, UC San Diego The Barcelona Graduate School of Economics, commonly referred to as Barcelona GSE, is an independent institution of research and graduate education located in Barcelona, in Catalonia, Spain. Banco Sabadell is the fourth-largest banking group funded by private Spanish capital. It includes several banks, brands, subsidiary and holding companies spanning the whole range of financial business.

Video from “Online gambling” project is now available
March 29, 2014
Andrew Ivchenko

Video presentation of the key design features of the project “Study on online gambling and adequate measures for the protection of consumers of gambling services”

Business is our new home
March 29, 2014
Andrew Ivchenko

Expilab has found its new independent home, inheriting the expertise and team from Gravitas Research's Behavioral and Experimental Research group. Reflecting on our journey, including significant projects like NHS Choices with top institutions, we're proud of our growth and achievements. Last year, Expilab conducted large-scale experiments for the European Commission, engaging over 30,000 participants across 13 EU member states. Now, as a smaller, more flexible team, we look forward to innovative research and engaging with you through our new website and blog. Join us in exploring the future of behavioural research.

Online Gambling: Consumer Protection Measures
Daniel Guerrero

After the announcement of WhatsApp on its new terms of use of users’ data, we feel that somehow full transparency of privacy concerns is not always the best strategy to gain credibility.

Personal data consent: What customers are afraid of and what do they look for?
Daniel Guerrero

How companies can increase personal data consent? Consumers’ reluctance to reveal their personal information is primarily triggered by the lack of adequate info, so companies can address that by providing clear and direct information of destination and purpose of data collected.

Dr. Heather Kappes on how people spend and spending patterns in post COVID19 world
Daniel Guerrero

Movers & Shakers interview with Dr. Heather Kappes (LSE) about how people spend, what economic research and economic experiments have taught us, and which research findings might be relevant for post COVID19 life.

Online Spending Game as a Behavioral Research Tool. Experiment at the Science Museum (London)
Daniel Guerrero

“Game of Life”, an interactive spending game played at Science Museum (London) build by Expilab investigates how and why we spend our money the way we do

The importance of GDPR discussion in Latin America
Nathaly Gómez

The European Union (EU) began the implementation of the GDPR (General Data Privacy Regulation) in May 2018 with the aim of developing a legal framework that provides more control over the use of personal data obtained through online services or databases. Today, the discussion has begun in countries such as Brazil with the aim of providing users with greater security and knowledge of their actions, and to avoid repeating episodes such as Cambridge Analytica and Facebook

Public policy
La importancia de la discusión del GDPR en Latinoamérica
Nathaly Gómez

La Unión Europea dio inicio a la implementación del GDPR (General Data Privacy Regulation) en mayo de 2018 con la que busca crear un marco jurídico que brinde más control sobre el uso que se dan a los datos personales obtenidos a través de servicios en línea o bases de datos. Hoy en día, se ha iniciado la discusión en países como Brasil con el objetivo de brindar a los usuarios mayor seguridad y conocimiento de sus acciones en el tema y a su vez, evitar que se repitan episodios como el de Cambridge Analytica y Facebook.

Quédate en casa y toma buenas decisiones
Daniel Guerrero

La epidemia de coronavirus (Covid-19) ha generado una alarma mundial que provocó que los gobiernos recurrieran al uso de medidas restrictivas. Sin embargo, el aislamiento está trayendo efectos negativos para la salud mental que también son necesarios de atender.

Stay home and make good decisions
Daniel Guerrero

The Coronavirus epidemic (Covid-19) has generated a worldwide alarm that resulted in governments resorting to use of restrictive measures. However, isolation is bringing negative effects to mental health that are also necessary to attend.

In your neighborhood: Are you Altruist, Egoist… or a Hooligan? (ENG/ESP)
Daniel Guerrero

TL;DR Generosity in small neighborhoods generates virtuous cycles that promote the mutation of egoistic behaviors into reciprocity

Labels as nudges? An experimental study of car eco-labels

This article presents the results of a laboratory experiment and an online multi-country experiment testing the effect of motor vehicle eco-labels on consumers. The laboratory study featured a discrete choice task and questions on comprehension, while the ten countries online experiment included measures of willingness to pay and comprehension. Labels focusing on fuel economy or running costs are better understood, and influence choice about money-related eco-friendly behavior. We suggest that this effect comes through mental accounting of fuel economy. In the absence of a cost-saving frame, we do not find a similar effect of information on CO2 emissions and eco-friendliness. Labels do not perform as well as promotional materials. Being embedded into a setting, which is designed to capture the attention, the latter are more effective. We found also that large and expensive cars tend to be undervalued once fuel economy is highlighted.

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