Richard Warner and Robert H. Sloan, Behavioral Advertising: From One-Sided Chicken to Informational Norms
Comment by: Aaron Massey
Published version available here: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2034424
Workshop draft abstract:
When you download the free audio recording software from Audacity, your transaction is like any traditional provision of a product for free or for a fee—with one difference: you agree that Audacity may collect your information and use it to send you advertising. Billions of such “data commercialization” (DC) exchanges occur daily. They feed data to a massive advertising ecosystem that constructs individual profiles in order to tailor web site advertising as closely as possible to individual interests. The vast majority of us object. We want considerably more control over our information than websites that participate in the advertising ecosystem allow. Our misgivings are evidently idle, however. We routinely enter DC exchanges when we visit CNN.com, use Gmail, or visit any of a vast number of other websites. Why? And, what, if anything, should we do about it?
We answer both questions by describing DC exchanges as a game of Chicken that we play over and over with sellers under conditions that guarantee we will always lose. Chicken is traditionally played with cars. Two drivers at opposite ends of a road drive toward each other at high speed. The first to swerve loses. We play a similar game with sellers—with one crucial difference: we know in advance that the sellers will never “swerve.”
In classic Chicken with cars, the players’ preferences are mirror images of each other. Imagine, for example, Phil and Phoebe face each other in their cars. Phil’s first choice is that Phoebe swerve first. His second choice is that they swerve simultaneously. Mutual cowardice is better than a collision. Unilateral cowardice is too, so third place goes to his swerving before Phoebe does. Collision ranks last. Phoebe’s preferences are the same except that she is in Phil’s place and Phil in hers. Now change the preferences a bit, and we have the game we play in DC exchanges. Phil’s preferences are the same, but Phoebe’s differ. She still prefers that Phil swerve first, but collision is in second place. Suppose Phoebe was recently jilted by her lover; as a result, her first choice is to make her male opponent reveal his cowardice by swerving first, but her second choice is a collision that will kill him and her broken-hearted self. Given these preferences, Phoebe will never swerve. Phil knows Phoebe has these preferences, so he knows he has only two options: he swerves, and she does not; and, neither swerves. Since he prefers the first, he will swerve. Call this One-Sided Chicken.
We play One-Sided Chicken when in our website visits we enter DC exchanges. We argue that buyers’ preferences parallel Phil’s while the sellers’ parallel heart-broken, “collision second” Phoebe’s. We name the players’ choices in this DC game “Give In,” (the “swerve” equivalent) and “Demand” (the “don’t swerve” equivalent). For buyers, “Demand” means refusing to use the website unless the seller’s data collection practices conform to the buyer’s informational privacy preferences. “Give in” means permitting the seller to collect and process information accord with whatever information processing policy it pursues. For sellers, “Demand” means refusing to alter its information processing practices even when they conflict with a buyer’s preferences. “Give in” means conforming information processing to a buyer’s preferences. We contend that sellers’ first preference to demand while buyers to give in and that their second is the collision equivalent in which both sides demand. Demanding sellers leave buyers only two options: give in and use the site, or demand and do not. Since buyers prefer the first option, they always give in.
It would be better if we were not locked into One-Sided Chicken. Ideally, informational norms should regulate the flow of personal information. Informational norms are norms that constrain the collection, use, and distribution of personal information. In doing so, they implement tradeoffs between protecting privacy and realizing the benefits of processing information. Unfortunately, DC exchanges are one of a number of situations in which rapid advances in information processing technology have outrun the slow evolution of norms.
How do we escape from One-Sided Chicken to appropriate informational norms? Chicken with cars contains a clue. In the late 1950s B-grade Hollywood youth movie, Phil would introduce broken-hearted Phoebe to just-moved-to-town Tony. They would fall in love, and, in a key dramatic turning point, Phil and Phoebe would play Chicken. Phoebe would see that Tony is also in the car and be the first to swerve. We need a “Tony” to change businesses’ preferences. We contend that we would all become the DC exchange equivalent Tony if we had close to perfect tracking prevention technologies. Tracking prevention technologies are perfect when they are 100% effective in blocking information processing for advertising purposes, completely transparent their effect, effortless to use, and permit the full use of the site. Phoebe swerves because she does not want to lose her beloved Tony. Sellers are “in love with” advertising revenue. We argue that they will “swerve” to avoid losing the revenue they would lose if buyers prevented data collection for advertising purposes. The result will be that, in a sufficiently competitive market, appropriate informational norms arise. We conclude by considering the prospects for approximating perfect tracking prevention technologies.