Is the Privacy Paradox in Fact Rational?

Abstract

Research on the privacy paradox - the dichotomy between individuals’ intentions to disclose personal information and their actual disclosure behavior - has become popular as policy makers have been working on privacy laws. This article provides a literature review of the privacy paradox across fields of study. Many researchers have explored the privacy paradox and come up with the conclusion that decisions taken by individuals regarding the transmission of private data were irrational. This article first provides a systematized review of the extensive literature in psychology, sociology, management, economics and biology that explores the decision-making process related to online transfer of private data. Then, we show that the literature seems to agree on the fact that people act either rationally or with limited rationality. To conclude, we focus on the potential importance of awareness campaigns or key historical moments to explain the different sensitivities people have regarding privacy issues.