Consumer Privacy Concerns and Preference for Degree of Regulatory Control

TLDR

The study examines how consumers’ privacy concerns affect their preferences for regulatory control in mobile advertising and discusses related theoretical and managerial implications. Using social contract theory, the authors model how prior negative experience, information privacy concerns, perceived ubiquity, trust, and perceived risk influence preference for regulatory control. Survey data from 510 Japanese mobile users show that prior negative experiences heighten privacy concerns and perceived risk, driving a preference for stricter regulatory controls, while perceived ubiquity and information sensitivity further erode trust but do not affect perceived risk.

Abstract

This study explores the consequences of consumers' privacy concerns in the context of mobile advertising. Drawing on social contract theory, the proposed research model connects a series of psychological factors (prior negative experience, information privacy concerns, perceived ubiquity, trust, and perceived risk) and preference for degree of regulatory control. Data from a survey of 510 mobile phone users in Japan show that mobile users with prior negative experiences with information disclosure possess elevated privacy concerns and perceive stronger risk, which leads them to prefer stricter regulatory controls in mobile advertising. Both perceived ubiquity and sensitivity of the information request further the negative impact of privacy concerns on trust. No such effect occurs for the impact of privacy concerns on perceived risk, however. The authors discuss some theoretical and managerial implications.