Tearing the Veil of Privacy Law: An Experiment on Chilling Effects and the Right to Be Forgotten

Date: 2013-08
By: Yoan Hermstrüwer (Max Planck Institute for Research on Collective Goods, Bonn)
Stephan Dickert (Vienna University of Economics and Business, Institute for Marketing and Consumer Research)
URL: http://d.repec.org/n?u=RePEc:mpg:wpaper:2013_15&r=net
Privacy law relies on the argument that consent does not entail any relevant impediments for the liberty of the consenting individual. Challenging this argument, we experimentally investigate whether consent to the publication of personal information in cyberspace entails self-coercion on a social norm level. Our results suggest that the monetary benefits from consent constitute a price that people are willing to accept for increased compliance with social norms. Providing people with a prior consent option is sufficient to generate chilling effects (i.e., a reduction of norm-deviant behavior). However, nudging people towards potential publicity does not increase the value they place on privacy. We also test how the default design of the right to deletion of personal information (right to be forgotten) affects chilling effects and privacy valuations. Surprisingly, the right to be forgotten does not reduce chilling effects. Moreover, individuals tend to stick with the status quo of permanent information storage.
Keywords: Social Norms, Nudges, Behavioral Law and Economics of Privacy, Consent, Right to Be Forgotten, Dictator Games
JEL: C93
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The Lure of Authority: Motivation and Incentive Effects of Power*

Fehr, Ernst, Holger Herz, and Tom Wilkening. 2013. “The Lure of Authority: Motivation and Incentive Effects of Power." American Economic Review, 103(4): 1325-59. DOI: 10.1257/aer.103.4.1325; ******;

Supplementary Materials:
Online Appendix
(469.58 KB) | Download Data Set (3.84 MB) | Author Disclosure Statement(s) (90.26 KB)

==實驗設計==

共玩10回合 (先玩 7 回合的 sigle-player; 再玩正式的 10 回合)

0.1. 配對 principal 和 agent

0.2. 兩者看到36張牌, 代表36個projects; 其中有一張牌翻開, 代表 outside option (很小的報酬); 其餘 35 張牌看不到, 但其中有一張紅色牌 Project 1代表 principal 最偏好的, 而另一張藍色 project 2 代表 agent 最偏好的; 其它 33張牌報酬皆 = 0. 這個報酬設計是讓 subject 兩者會選 outside option, 相對於隨機選 project。

stage

1.  principal 決定是否授權 (但 agent 尚不知道)

2. 雙方 “各自" 選擇努力水準 E/e (in a quadratic cost function, E/e ~ {0,5,10,… 95, 100}) , 努力水準和得知 project 的結果成正比

努力成本: gP(E)=25(E/100)^2;   gA(e)=25(e/100)^2

得知結果機率 pr(E)/pr(e); 不知結果: 1-pr(E/e)

3. 問雙方對對方努力水準之預期

principal 依授權決定, 先被問不授權 (授權) 下之 “預期 agent" 之努力水準, 再問授權 (不授權) 下之 “預期 agent" 之努力水準

agent 則被同時問; (預期對和錯與 payoff 無關)

4. agent 得知是否被授權; 並且 subject 依其努力水準, 隨機得知所有 project 的 payoffs (但還不知對手的努力和是否知道 project 之結果)

5. principal/agent 建議一個 project (但如果 agent/principal 是否知道 payoff, 取決於上一個 stage 4)

6. principal/agent 做出 project 的選擇, 並計算雙方的 payoffs

==notes by yinung==

這篇是討論 principal 對保留權力 (power) 的實驗, 也算是 group behavior 的創意研究。終於有人進行和我之前研究想法很類似的實驗研究了….

主要結論:

principal 願意犧牲一些利得,以保留決策權

… the principals are willing to sacrifice some of their earnings to keep authority suggests a preference for the decision right.

principal 在 “被知會但沒有決定權" 和 “未被知會" 兩種情況, 理論上效用應該無差異

Conditional on effort, an expected utility maximizing principal who is the subordinate of an informed agent should thus be indifferent between the case where she is informed and overruled by the agent and the case where she remains uninformed.

H0: 若 principal 對於被 overruled 有負效用, 則下一次會保留授權

… If, however, a principal experiences a nonpecuniary disutility from being overruled, her behavior after these two outcomes may differ: the principal may be less willing to delegate in the next period if overruled.

…an individual may maintain control in order to mitigate the potential for regret. (subjects want to avoid ex post regret about their choices—a hypothesis that was introduced by Loomes and Sugden (1982)… Regret aversion is a form of reference dependent utility and is based on the idea that subjects derive disutility from regret that arises by comparing their actual ex post outcomes with those the subject could have had by choosing a different action.

和過去文獻之差異:

… these papers (含 Bartling and Fischbacher 2012, Coffman 2011) study the assignment of punishment in response to the allocation choices of either a principal or a delegate, our article studies the willingness of the principal to delegate and the willingness of a principal and an agent to invest effort in response to the assignment of decision rights.

this literature (指 the literature on the hidden costs of control by Fehr and Rockenbach 2003; Fehr and List 2004; Falk and Kosfeld 2006; Charness et al. 2012) shows that the exercise of control reduces an individual’s positive reciprocity towards the principal, our article shows that lack of control has demotivating consequences on subordinates that induce them to act against their material self-interest.

Abstract

Authority and power permeate political, social, and economic life, but empirical knowledge about the motivational origins and consequences of authority is limited. We study the motivation and incentive effects of authority experimentally in an authority-delegation game. Individuals often retain authority even when its delegation is in their material interest—suggesting that authority has nonpecuniary consequences for utility. Authority also leads to overprovision of effort by the controlling parties, while a large percentage of subordinates underprovide effort despite pecuniary incentives to the contrary. Authority thus has important motivational consequences that exacerbate the inefficiencies arising from suboptimal delegation choices.

The Limits of Transparency: Pitfalls and Potential of Disclosing Conflicts of Interest

George Loewenstein & Daylian M. Cain & Sunita Sah, (2011) “The Limits of Transparency: Pitfalls and Potential of Disclosing Conflicts of Interest,"
American Economic Review,  vol. 101(3), pages 423-28, May. [link to AER]

Noted by Yi-Nung

這篇提及到 Can and Moore (2005, 2011) 的實驗, 有關利益衝突與揭露 (disclosure of conflicts);

可應用在:

centipede game (揭露/未揭露 first mover 的 payoff)
理專/Broker 揭露/未揭露 commission
Ultimatum game 改成 部份捐款給慈善機構 (或 as a public good), 是否會緩和 fairness 的要求

主要結論: more information, in general, is not very effective in improving decisions…. that disclosure does not replace more effective measures, such as working harder to eliminate conflicts of interest in the first place.

p.424: … the introduction of a subsidy or fine can undermine nonmaterial motives, disclosing a conflict of interest can likewise undermine the advisor’s motivation to adhere to professional standards. … Experimental research suggests that … people feel “licensed" to act immorally in subsequent interactions. Disclosure also introduces a possible rationalization for unethical behavior…"expect" bias.

research on judgment suggests that advisees are likely to “anchor" on the advice they receive and then adjust insufficiently, even though they know the advice may be biased (Tversky and Kahnemen, 1974) (先說先嬴…)

p.424:

…disclosure can lead to an increase rather than a decrease in trust if the disclosure is interpreted as a sign of honesty or if the fact that the advisor is receiving payments is interpreted as in indication of professional standing.

主要的例子:

1. 房地產仲介

2. 醫病諮詢

(p.242) In the absence of disclosure,…, a patient’s rejection of participation in a drug trial would likely be attributed to risk aversion… The same rejection,… might be attributed to the patient’s distrust of the doctor

3. 財務經紀人與顧問

Abstract:

We review evidence from our published and ongoing research that disclosing conflicts of interest has unintended consequences, helping conflicted advisors and harming their advisees: With disclosure, advisors feel comfortable giving more biased advice, but advisees do not properly adjust for this and generally fail to sufficiently discount biased advice. Disclosure also increases pressure on advisees to comply with advice; following disclosure, advisees feel more uncomfortable in turning down advice (e.g., it signals distrust of the advisor’s motives). Finally, we examine the effectiveness of policy interventions aimed at reducing these unintended consequences and discuss how to realize potential benefits of disclosure.