The individual and joint effects of data usage control & transparency on customers’ privacy responses
Journal
2021 AMA Summer Academic Conference
Type
conference poster
Date Issued
2021-02-25
Author(s)
Abstract
New (marketing) technologies drive an exponential increase in globally collected data (Reinsel, Gantz, and Rydning 2018, p. 3), a trend which is expected to further “escalate” customers vulnerability (Palmatier and Martin 2019, p. 87) in the coming years (see fig. 5). If unchecked, it is feared the trend may permanently erode con-sumers’ ability “to take make meaningful action” (Fast and Jago 2020, p. 44) to pro-tect their privacy. Together with the increasing number of yearly data breaches across industries (DLA Piper 2020, p. 4), the question on how to prevent and recover from corporate privacy failures grows in importance.
Previous literature has proposed firms should increase their customers’ data usage control and transparency to both reduce customers’ risk exposure and allow them to make more informed choices (Acquisti, Adjerid, and Brandimarte 2013; Beke, Eggers, and Verhoef 2018; Martin, Borah, and Palmatier 2017). While control and transparency have been shown to mediate negative customer reactions after a priva-cy failure (Martin, Borah, and Palmatier 2017), it is not clear what their individual effect is on the initial evaluation of a company as well as their individual importance for recovery after a corporate privacy failure.
This paper expands on existing privacy literature by juxtaposing the effects of data usage control and transparency individually, demonstrating that data usage trans-parency even without increased control has a more central role in trust recovery than previously reported.
The results have several implications for corporate data collection processes, first and foremost on the efficiency and effectiveness of engaging customers in a trans-parent privacy dialogue.
Previous literature has proposed firms should increase their customers’ data usage control and transparency to both reduce customers’ risk exposure and allow them to make more informed choices (Acquisti, Adjerid, and Brandimarte 2013; Beke, Eggers, and Verhoef 2018; Martin, Borah, and Palmatier 2017). While control and transparency have been shown to mediate negative customer reactions after a priva-cy failure (Martin, Borah, and Palmatier 2017), it is not clear what their individual effect is on the initial evaluation of a company as well as their individual importance for recovery after a corporate privacy failure.
This paper expands on existing privacy literature by juxtaposing the effects of data usage control and transparency individually, demonstrating that data usage trans-parency even without increased control has a more central role in trust recovery than previously reported.
The results have several implications for corporate data collection processes, first and foremost on the efficiency and effectiveness of engaging customers in a trans-parent privacy dialogue.
Language
English
HSG Classification
contribution to scientific community
HSG Profile Area
Global Center for Customer Insight
Publisher
2021 AMA Summer Academic Conference
Publisher place
2021 AMA Summer Academic Conference
Event Title
2021 AMA Summer Academic Conference
Event Location
Boston MA
Event Date
13-15.08.2021
Subject(s)
Contact Email Address
mauro.gotsch@unisg.ch
References
Acquisti, Alessandro, Idris Adjerid, and Laura Brandimarte (2013), “Gone in 15 seconds: The limits of privacy transparency and control,” IEEE Security and Privacy, 11 (4), 72–74.
Ayaburi, Emmanuel W. and Daniel N. Treku (2020), “Effect of penitence on social media trust and privacy concerns: The case of Facebook,” International Journal of Information Management, 50, 171–81.
Bansal, Gaurav and Fatemeh Mariam Zahedi (2015), “Trust violation and repair: The information privacy perspective,” Decision Support Systems, 71, 62–77.
Bansal, Gaurav, Fatemeh Mariam Zahedi, and David Gefen (2016), “Do context and personality matter? Trust and privacy concerns in disclosing private information online,” Information and Management, 53 (1), 1–21.
Beke, Frank T., Felix Eggers, and Peter C. Verhoef (2018), Consumer Informational Privacy: Current Knowledge and Research Directions, Foundations and Trends in Marketing.
Chen, Hsiangting Shatina and Tun-Min (Catherine) Jai (2019), “Trust fall: data breach perceptions from loyalty and non-loyalty customers,” The Service Industries Journal, 1–17.
Dinev, Tamara, Heng Xu, Jeff H Smith, and Paul Hart (2012), “Information privacy and correlates: an empirical attempt to bridge and distinguish privacy-related concepts,” European Journal of Information Systems, 22, 295–316.
DLA Piper (2020), “DLA Piper GDPR Data Breach Survey: January 2020,” London.
eBay Inc. (2014), “eBay Inc. To Ask eBay Users To Change Passwords,” ebay, (accessed February 23, 2021), [available at https://www.ebayinc.com/stories/news/ebay-inc-ask-ebay-users-change-passwords/].
Equifax (2017), “Equifax Announces Cybersecurity Incident Involving Consumer Information | Equifax,” Equifax Website, (accessed February 23, 2021), [available at https://investor.equifax.com/news-and-events/press-releases/2017/09-07-2017-213000628].
Fast, Nathanael J. and Arthur S. Jago (2020), “Privacy matters… or does It? Algorithms, rationalization, and the erosion of concern for privacy,” Current Opinion in Psychology, 31 (2), 44–48.
Hayes, Andrew F., Amanda K. Montoya, and Nicholas J. Rockwood (2017), “The analysis of mechanisms and their contingencies: PROCESS versus structural equation modeling,” Australasian Marketing Journal, Elsevier Australia.
Martin, Kelly D., Abhishek Borah, and Robert W. Palmatier (2017), “Data Privacy: Effects on Customer and Firm Performance,” Journal of Marketing, 81 (1), 36–58.
Palmatier, Robert W. and Kelly D. Martin (2019), The Intelligent Marketer’s Guide to Data Privacy, Basingstoke: palgrave macmillan.
Reinsel, David, John Gantz, and John Rydning (2018), “The Digitization of the World - From Edge to Core,” Framingham, MA.
Target Corporation (2013), “Target Confirms Unauthorized Access to Payment Card Data in U.S. Stores,” A Bullseye View, (accessed February 23, 2021), [available at https://corporate.target.com/press/releases/2013/12/target-confirms-unauthorized-access-to-payment-car].
Ayaburi, Emmanuel W. and Daniel N. Treku (2020), “Effect of penitence on social media trust and privacy concerns: The case of Facebook,” International Journal of Information Management, 50, 171–81.
Bansal, Gaurav and Fatemeh Mariam Zahedi (2015), “Trust violation and repair: The information privacy perspective,” Decision Support Systems, 71, 62–77.
Bansal, Gaurav, Fatemeh Mariam Zahedi, and David Gefen (2016), “Do context and personality matter? Trust and privacy concerns in disclosing private information online,” Information and Management, 53 (1), 1–21.
Beke, Frank T., Felix Eggers, and Peter C. Verhoef (2018), Consumer Informational Privacy: Current Knowledge and Research Directions, Foundations and Trends in Marketing.
Chen, Hsiangting Shatina and Tun-Min (Catherine) Jai (2019), “Trust fall: data breach perceptions from loyalty and non-loyalty customers,” The Service Industries Journal, 1–17.
Dinev, Tamara, Heng Xu, Jeff H Smith, and Paul Hart (2012), “Information privacy and correlates: an empirical attempt to bridge and distinguish privacy-related concepts,” European Journal of Information Systems, 22, 295–316.
DLA Piper (2020), “DLA Piper GDPR Data Breach Survey: January 2020,” London.
eBay Inc. (2014), “eBay Inc. To Ask eBay Users To Change Passwords,” ebay, (accessed February 23, 2021), [available at https://www.ebayinc.com/stories/news/ebay-inc-ask-ebay-users-change-passwords/].
Equifax (2017), “Equifax Announces Cybersecurity Incident Involving Consumer Information | Equifax,” Equifax Website, (accessed February 23, 2021), [available at https://investor.equifax.com/news-and-events/press-releases/2017/09-07-2017-213000628].
Fast, Nathanael J. and Arthur S. Jago (2020), “Privacy matters… or does It? Algorithms, rationalization, and the erosion of concern for privacy,” Current Opinion in Psychology, 31 (2), 44–48.
Hayes, Andrew F., Amanda K. Montoya, and Nicholas J. Rockwood (2017), “The analysis of mechanisms and their contingencies: PROCESS versus structural equation modeling,” Australasian Marketing Journal, Elsevier Australia.
Martin, Kelly D., Abhishek Borah, and Robert W. Palmatier (2017), “Data Privacy: Effects on Customer and Firm Performance,” Journal of Marketing, 81 (1), 36–58.
Palmatier, Robert W. and Kelly D. Martin (2019), The Intelligent Marketer’s Guide to Data Privacy, Basingstoke: palgrave macmillan.
Reinsel, David, John Gantz, and John Rydning (2018), “The Digitization of the World - From Edge to Core,” Framingham, MA.
Target Corporation (2013), “Target Confirms Unauthorized Access to Payment Card Data in U.S. Stores,” A Bullseye View, (accessed February 23, 2021), [available at https://corporate.target.com/press/releases/2013/12/target-confirms-unauthorized-access-to-payment-car].
Eprints ID
262494
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