Exit, Voice, and the Privacy Paradox

Chris Hoofnagle
Aug 4, 2014 · 5 min read
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Do we wear two
faces on privacy?
Side view of a Janus

Privacy surveys find that individuals care about privacy, but any observer of social networks can find a great deal of profligate, ill-advised information sharing. This is the so called privacy paradox, the idea that “People’s concerns toward privacy are unrelated to the privacy behaviors. Even though users have substantial concerns with regard to their online privacy, they engage in self-disclosing behaviors that do not adequately reflect their concerns.” The privacy paradox is a major problem for consumer advocates. It suggests that advocates are out of touch with average consumers and that government should not intervene in privacy because individuals really do not care about it. The paradox contributes to a general feeling that consumers are frivolous and fickle, and that their attitudes simply do not matter.

Explaining the Privacy Paradox

Observation error may also explain the paradox. It is very easy to recall episodes of unfortunate disclosures, and those that disclose are rewarded (or punished) with attention. The decision to exercise discretion is not recorded or remembered by others.

Exit, Voice, and the Privacy Paradox

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Hirschman’s little book, written in 1970, predicted that school choice, in combining exit and voice options, would be a disaster. Well-resourced parents would opt-out from public schools, leaving behind those least able to reform them.

Political scientists consider voice in analyzing discontent. Voice is “any attempt at changing the practices, policies, and outputs of the firm from which one buys…” In many relationships, including family, church, and state, exit is impractical, and so voice is the only realistic way to participate in the “market” to shape these relationships. Thus we persuade, argue, campaign, and even protest to give effect to our desires.

Online services operate in the market, but have many characteristics of political and social entities. Many online services style themselves similarly to family, church, and state. Facebook, Twitter, Google and others have promoted their services as tools for democracy. The economic purposes of these companies are often not mentioned, or are framed as adjunct to social and political goals. Facebook often expresses its mission as to “connect the world.” For a time, it even had “community voting.” Consumers have bought into the message that these technologies are a social force for good. They often are emotionally invested in online services, and exercise protest and other political behaviors when unwelcome changes occur.

Facebook in particular shares attributes with family, church, and state because we are locked in to these entitles. Switching is impractical and emotionally troubling.

A better social network is still inferior to Facebook because if you decide to defect to a competitor, you will be alone unless you can convince the people you know and the ones you would like to know to follow.

What Voice Means for Privacy and the Privacy Paradox

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Facebook grew to prominence through an elaborate bait and switch. It featured exclusivity to dislodge MySpace, but later forced user profiles into more publicity. Recently a “pivot” back to privacy has been reported.
L’Homme de la cour 1791 l’homme du peuple 1789

What does voice mean for privacy? While exit is a powerful remedy to evince unhappiness, voice is a much weaker tool of discontent. Voice tends to work when there is an important cohort of dissatisfied constituents who are willing to and can complain articulately. Voice needs institutions to amplify weaker consumers’ objections. Perversely, Hirshman explains, if an exit is available, the most powerful and articulate consumers are the first to take it, leaving everyone else behind.

How could the market change practices of a Facebook? The most important consumers would have to organize and demand reform. This is very unlikely, because in “free” online services, the most important constituencies are advertisers. The next best alternative comes from a key user base, perhaps celebrities with millions of followers, who could organize to force a policy change.

To make voice more effective, we need to support the institutions that cajole for better practices. This means supporting the Federal Trade Commission and the (sometimes overheated) activities of privacy advocates. We need to arm users with language that enables them to give voice to their concerns. For instance, at a recent hearing, a search engine company claimed that their users were really concerned with identity theft, not comprehensive tracking of individuals. That seemed to me to be a form of selective hearing, or modulation of unfocused voice into a different meaning that drew attention away from the company.

More fundamentally, we should question the assumptions underlying the privacy paradox. If it is understood with the impoverished view that only exit matters, we will misinterpret individuals’ actions and policymakers can buy into narratives that people are hypocrites who do not really care about privacy. If we consider voice, attitudes and action may not be in conflict.

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