The Influence of Privacy Dispositions on Perceptions of Information Transparency and Personalization Preferences

Abstract

To attract customers, firms offer personalized services. This is perceived beneficial by many customers as it enhances the purchase experience and addresses customers’ needs. However, to offer personalized services, customer data has to be collected and analyzed. This practice gives rise to privacy concerns and can inhibit the usage of such services. Our research aims to address the tension between personalization and privacy by applying information boundary theory to investigate how respondents’ disposition to value privacy and the availability of information transparency features influences individuals’ intention to disclose information to personalized services. Based on an experimental study, we find a significant interaction between disposition to value privacy and personalization, while the implementation of transparency features does not yield substantial changes in information disclosure. Thus, in order to successfully offer personalized services, we recommend that practitioners take individuals’ privacy preferences into account for their service design.