No Free Lunch: Price Premium for Privacy Seal-Bearing Vendors

• 成果类型: Article
• 署名作者: Mai, Bin; Menon, Nirup M.; Sarkar, Sumit
• 署名单位: University System of Maryland; Bowie State University; University of Louisiana System; Northwestern State University of Louisiana; George Mason University; University of Texas System; University of Texas Dallas; Texas Tech University System; Texas Tech University
• 刊物名称: JOURNAL OF MANAGEMENT INFORMATION SYSTEMS
• ISSN/ISSBN: 0742-1222
• DOI: 10.2753/MIS0742-1222270206
• 发表日期: 2010
• 页码: 189-212
• 关键词: customer satisfaction; self-regulation; E-commerce; online; internet; dispersion; trust; MODEL; COMPETITION; TECHNOLOGY

摘要

Privacy is a significant concern of customers in the business-to-consumer online environment. Several technical, economic, and regulatory mechanisms have been proposed to address online privacy. A current market-based mechanism is the privacy seal, under which a third party assures adherence by a vendor to its posted privacy policy. In this paper, we present empirical evidence of the effect of displaying a privacy seal on the product prices of online vendors of electronic books, downloadable audiobooks, and textbooks. Using data collected on these relatively homogeneous products sold by online vendors, we find that while controlling for vendor-specific characteristics, vendors bearing privacy seals charge a premium for such products compared to vendors not bearing a seal. The paper provides empirical evidence of the economic value of privacy assurance from the customers' perspective as measured by the price premium charged for products. The research has implications for researchers and policymakers by providing evidence that privacy is another factor that creates friction in e-commerce, and that prices on the Internet for homogeneous products need not converge.