Irrational Privacy?

The purpose of this symposium is to consider the implications of important recent work at the intersection of behavioral economics and information privacy. There is much to celebrate in this work, which has improved our understanding of the ways that markets in personal information actually function. Yet behavioral economic analysis has done little to defuse the most intractable problem that emerges from the study of so-called “information privacy markets.” The problem appears initially as a question of terminology. Discussing whether or not information privacy markets work presumes something rather important about what exactly such markets produce. The terminological question leads into an epistemological difficulty that has bedeviled information privacy law and policy: explaining what information privacy markets produce (if not “information privacy”) can cause information privacy claims to seem irrational at the most basic level. This essay seeks to force the epistemological question onto the behavioral economists’ table. I will first argue that the term “information privacy markets” is a misnomer; information privacy markets do not in fact produce more information privacy but instead produce its opposite: more and more information about the actual or hypothesized attributes of individuals and groups. It does not follow, however, that a condition of information privacy (i.e., a condition of diminished or restricted access to personal information) is inherently antithetical to knowledge. Information privacy markets produce one kind of knowledge, but not the only kind. The condition of information privacy, and the kinds of knowledge it privileges, are best understood not as irrational but as differently rational—predicated on an approach to knowledge that we do not prize nearly as much as we should. In other words, information privacy’s seeming irrationality should trouble us a lot less than it seems