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Abstract
E-commerce and online services have transformed the way in which consumers and vendors interact. A key change has been brought by the diffusion of a zero-pricing strategy exemplified by the big digital companies like Google, Facebook and Twitter. The resource at the centre of such a transformation is consumers’ personal information (i.e., PI), which until recently remained private. PI is what companies get from customers in exchange for the service they provide allegedly for free or, from an opposite perspective, the price customers pay to get free online services.
These consumers prefer to incur zero monetary payment in exchange for a large non-monetary payment in the form of personal information which is then monetized in a secondary market by the service providers. In recent years mainstream news and academic contributions have been highlighting the fact that users seem to underestimate the amount of PI released online and the potential consequences of that. Substantial literature shows that internet users have little idea about what happens to their PI online. Accordingly, literature from several disciplines reports that systematic inconsistencies and biases hamper how consumers valuate their PI and make their choices in this area. In other words, individuals don t fully appreciate the difference between cost and price of the service, the former being higher than the latter, and the incentives designed to make this difference salient are not effective.
Despite growing literature about consumers’ privacy, an organic vision that encapsulates PI payment mechanisms into an advertising business model is somehow incomplete. This is our attempt to fill such a gap. Firstly, PI has characteristics that, compared to money, are distinct and induce consumers to inconsistent valuations (i.e., privacy paradox), eventually determining PI underestimation and leading to overconsumption. More specifically, consumers’ PI is a non-rival resource deeply bundled with service benefits. Secondly, PI payments elicit a lower level of somatic signals (i.e., Pain of Paying) than monetary payments. As the emotional cue usually acts in anticipation of future outcomes, PI payments would lead again to overconsumption via underestimation of service costs. Finally, we approach consumer underestimation of the costs of sharing PI from a temporal discount perspective of monetary vs nonmonetary resources.