Too Tired and in Too Good of a Mood to Worry About Privacy: Explaining the Privacy Paradox Through the Lens of Effort Level in Information Processing

Abstract

The confluence of digital transactions, growing cybersecurity threats, and the internet of the future (e.g., web 3.0 and the metaverse) have made information privacy increasingly important to consumers and companies that rely on consumers willingly sharing their personal information. Although information privacy has been of interest to researchers for decades and much has been learned, one thing that perplexes scholars is the privacy paradox, which we define as a mismatch between stated privacy concerns and actual disclosure behaviors. In this paper, we shed light on this phenomenon and show that low-effort information processing triggered by cognitive depletion (Experiment 1), positive mood (Experiment 2), or both (Experiment 3) significantly attenuates the association between stated privacy concerns and disclosure behaviors. These findings do not indicate that individuals do not care about privacy because we find consistent evidence in the three experiments for a significant negative association between stated privacy concerns and disclosure behaviors when individuals have sufficient cognitive capacity (Experiment 1), experience a negative (or neutral) mood (Experiment 2), or have sufficient cognitive capacity coupled with a negative mood state (Experiment 3). Our findings reveal that the paradox is neither an absolute phenomenon nor a myth, but its existence is conditional on contextual factors, including psychological factors related to information processing. We discuss our contribution to privacy theory and provide implications for consumers, companies, and policymakers. History: Alessandro Acquisti, Senior Editor; Idris Adjerid, Associate Editor. Supplemental Material: The online appendix is available at https://doi.org/10.1287/isre.2022.1182.