The Effect of Privacy Notices

An example of behavioral response to alerting consumers,

The Bulletproof Glass Effect: When Privacy Notices Backfire

by Aaron R. Brough, David A. Norton, and Leslie John in HBSWK

Consumers regularly encounter privacy notices explaining if and how their personal information will be collected, stored, used, and shared. Evidence in this study demonstrates that privacy notices, though designed to promote a sense of confidence that personal data will not be misused, can undermine consumer trust and decrease purchase intent.

Author Abstract
Firms typically provide assurances to consumers about data management practices in the form of privacy notices. This manuscript proposes that ironically, such assurances can fuel rather than alleviate privacy concerns. Indeed, we show that consumers react to assurances as if they were warnings—a counterintuitive phenomenon because unlike warnings, which communicate danger, assurances are designed to communicate protection. Across one field experiment and five lab experiments, we show that a salient (vs. an absent or less salient) privacy notice can lead to decreased rather than increased purchase intent. This effect is mediated by consumer trust and is robust to the language in the privacy notice—it occurs even when the notice is overtly assuring, as well as when consumers see only a link to the notice but do not view its contents. The attenuation of the effect in joint (vs. separate) evaluation suggests that consumers’ hesitation to transact with organizations that have a salient privacy notice is not likely driven by an active aversion to assurances but rather by the arousal of dormant privacy concerns.

Paper Information
Full Working Paper Text (pdf) http://www.hbs.edu/faculty/pages/download.aspx?name=20-089.pdf
Working Paper Publication Date: February 2020
HBS Working Paper Number: HBS Working Paper #20-089
Faculty Unit(s): Negotiation, Organizations & Markets .... "