Investigating the impact of differential privacy obfuscation on users’ data disclosure decisions

Differential Privacy (DP) has emerged as the standard for privacy-preserving analysis of individual-level data. Despite growing attention in the research community to the operationalization of DP through the selection of the privacy budget $\varepsilon$, little is known about how DP obfuscation affects users’ disclosure decisions in data market scenarios. These decisions may be context-specific and vary with privacy preferences, eliciting disparate data valuations across individuals. Through a choice-based conjoint analysis ($N_1=588$), simulating realistic data markets, we analyzed how varying DP protection levels influence individual decision-making of participation in data collection under DP. Our findings show that personal reward and the guaranteed DP protection had the strongest influence on participants’ selection of a data collection scenario. Surprisingly, the type of disclosed data had the least influence on participants’ decisions to disclose personal data, a trend consistent across participants from different countries. Furthermore, increasing the DP protection level by a single unit reduced the preferred compensation price by over 60% for the same level of user utility, with marginal effects diminishing exponentially at higher DP levels. Our results were then confirmed in an online study ($N_2=146$) involving real data disclosure with actual payments, using our original scenario framing. Our findings can support context-specific DP configuration and help data practitioners improve decision-making associated with privacy protection in differentially private systems, balancing the trade-off between DP and compensation costs.