What can behavioral economics teach us about privacy?

Privacy is a complex decision problem resulting in opinions, attitudes, and behaviors that differ substantially from one individual to another [1]. Subjective perceptions of threats and potential damages, psychological needs, and actual personal economic returns all play a role in affecting our decisions to protect or to share personal information. Thus, inconsistencies or even contradictions emerge in individual behavior: Sometimes we feel entitled to protection of information about ourselves that we do not control and end up trading away that same information for small rewards. Sometimes we worry about personal intrusions of little significance, but overlook those that may cause significant damages. In previous works [1-4], we have highlighted a number of difficulties that distance individual actual privacy decision making from that prescribed by classical rational choice theory.