R E P O RT S E R I E S SUMMER 2011

Social Networks, Personalized Advertising, and Perceptions of Privacy Control Catherine Tucker MIT Sloan School of Management

www.twcresearchprogram.com





For more information:

Fernando Laguarda 901 F Street, NW Suite 800 Washington, DC 20004 Phone: (202) 370-4245 www.twcresearchprogram.com twitter.com/TWC_RP

Table of Contents Foreword................................................................................................................................................... 2 By Fernando R. Laguarda, Time Warner Cable 1. Introduction...................................................................................................................................... 3 1.1 Contribution.....................................................................................................................................5 2. Institutions and Data...................................................................................................................... 7 2.1 The Nonprofit Organization (NPO)..............................................................................................7 2.2 Randomized Campaign...................................................................................................................7 2.3 The Introduction of Improved Privacy Controls.........................................................................8 2.4 Data....................................................................................................................................................9 3. Analysis ............................................................................................................................................ 11 3.1 Further Robustness Checks..........................................................................................................16 3.2 Economic Significance..................................................................................................................17 3.3 Mechanism: Rarity of User Information.....................................................................................18 3.4 Further Evidence from an Experimental Setting.......................................................................19 4. Implications....................................................................................................................................22 Appendix A: Data.................................................................................................................................. 23 Endnotes.................................................................................................................................................29 References............................................................................................................................................. 30 Acknowledgments............................................................................................................................... 33 About the Author..................................................................................................................................34

Social Networks, Personalized Advertising and Perceptions of Privacy Control

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Foreword By Fernando R. Laguarda, Time Warner Cable

Consumers are enjoying a growing assortment of digital technologies that give them access to content and applications and allow them to seamlessly share and manage their personal information. But this evolving ecosystem presents new challenges for policymakers who seek to protect the privacy of personally identifiable information (PII) while preserving the important consumer benefits of broadband-enabled services and applications. At times it seems the policy debate over privacy can get overly heated. For that reason, we believe there is a role for good scholarship to further understanding of the issues at stake. This report, Social Networks, Personali