Information Disclosure and the Online Customer Relationship Bruce Forman Brian Whitworth

Information Disclosure Online purchasing is an increasingly significant part of trade Online purchasing is an increasingly significant part of trade The online disclosure of personal information (like name, address, credit card) is critical to online trade The online disclosure of personal information (like name, address, credit card) is critical to online trade  To purchase online, one must disclose personal data People are often unwilling to disclose personal information online for various reasons (privacy) People are often unwilling to disclose personal information online for various reasons (privacy)

Determinants of Disclosure Two reasons to disclose are: Two reasons to disclose are:  Rational Utility: There is a physical benefit to disclosure, e.g. in order to have a product shipped you must give your address  Social Utility: There is a social benefit to disclosure, e.g. one may gain a friend or become part of a group

Rational Utility Models 1 Administrative Model Administrative Model  Expected (Gain/Loss) = Probability (G/L) * Magnitude (G/L)  Decision-makers finite cognitive ability and limited information leads to satisficing Question: Why would anyone ever disclose anything unless there was a direct gain? Yet people do. Question: Why would anyone ever disclose anything unless there was a direct gain? Yet people do.

Rational Utility Models 2 Social Information Processing Social Information Processing  Plain text cues transmit at a slower rate than richer channels such as voice  Predicts online relationships should be slow to develop  Yet online interactions can achieve higher levels of intimacy/disclosure than face-to-face, and often disclose from the beginning of the interaction.

Example - Privacy contract   Gives customer risk information  They are being observed  How their data will be used  Who will be able to access data  How long data will be kept  Any consequences Assumes rational risk analysis  Yet 70-80% of people don’t read privacy contracts!  May be using marks like the TrustE symbol as a community warrantee

Social Penetration Model Relationships involve a turn-based process of mutual self-disclosure Relationships involve a turn-based process of mutual self-disclosure They progress from superficial to deeper: They progress from superficial to deeper:  Mutual disclosure  Mutual understanding  Intimacy Reciprocal disclosure – I disclose because you disclose, and you disclose because I do Reciprocal disclosure – I disclose because you disclose, and you disclose because I do Hence the value of initial self-disclosure Hence the value of initial self-disclosure

Reciprocal disclosure Disclosure by A Understanding by B Disclosure by B Understanding by A

Reasons to disclose - summary Include Include  Rational risk/benefit assessment (as in a privacy contract)  Personal relationship development (customer relationship)  Group trustworthiness recommendations (like the TrustE symbol) The first two are affected by the type of personal information The first two are affected by the type of personal information

Type of personal information - What “self” is disclosed?TypeDefinitionExamples Possible harm Physical Physical Being: In physical world that can be seen, touched and heard Home address Work address Photo Genetic data Physical: Property Damage Harassment Stalking Community Community being: In community records and documents Social Security # Birth record Student ID# Immigration # Marriage details Reputation: Criminal record Embarrassment Expulsion Surveillance Financial Economic being: In bank and insurance records Credit card Signature Passwords Financial: Credit theft Identity theft Interpersonal Social being: In the connections between people ( and phone lists). Home/Work/Cell phone address Home page site Online persona Communication: Telemarketing Obscene calls Being ostracized Spam

Preliminary study To define a baseline for how people disclose different types of information To define a baseline for how people disclose different types of information Participants asked what personal information they would disclose in a hypothetical online bulletin board NamePersonal Work Work Phone Home PhoneHome Address Cell PhonePhotograph

Results P < P < Disclosure seems to depend on degree of risk plus probability of risk. Disclosure seems to depend on degree of risk plus probability of risk. Name Persons Work Work phone Home phone Home address Cell phone Photo 51%41%41%35%10%8%6%6%

Future work 2x2 study of 2x2 study of  Risk declaration (privacy vs no privacy contract)  Risk compensation (, physical address)  Risk compensation (Site administrator provides self-photo and, physical address) Need to control for community symbols like TrustE that suggest community approval Need to control for community symbols like TrustE that suggest community approval  Note the TrustE symbol says nothing about the quality of the privacy contract.

Discussion Perceived online risk affects disclosure and trade Current online trade is lower than it should be   Because of perceived online risk Disclosure type affects degree of disclosure Rational risk models of disclosure are incomplete Social relationships reduce perceived social risk  Current interactions affect future interactions  Cheating jeopardizes relationship and all future gains. If online traders disclose personal information like self- photo/address, customers are more likely to trust and trade