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We investigate privacy concerns and the privacy behavior of users of the AR smartphone game Pokémon Go. Pokémon Go accesses several functionalities of the smartphone and, in turn, collects a plethora of data of its users. For assessing the privacy concerns, we conduct an online study in Germany with 683 users of the game. The results indicate that the majority of the active players are concerned about the privacy practices of companies. This result hints towards the existence of a cognitive dissonance, i.e. the privacy paradox. Since this result is common in the privacy literature, we complement the first study with a second one with 199 users, which aims to assess the behavior of users with regard to which measures they undertake for protecting their privacy. The results are highly mixed and dependent on the measure, i.e. relatively many participants use privacy-preserving measures when interacting with their smartphone. This implies that many users know about risks and might take actions to protect their privacy, but deliberately trade-off their information privacy for the utility generated by playing the game.
Pokémon Go is one of the most successful mobile games of all time. Millions played and still play this mobile augmented reality (AR) application, although severe privacy issues are pervasive in the app due to its use of several sensors such as location data and camera. In general, individuals regularly use online services and mobile apps although they might know that the use is associated with high privacy risks. This seemingly contradictory behavior of users is analyzed from a variety of different perspectives in the information systems domain. One of these perspectives evaluates privacy-related decision making processes based on concepts from behavioral economics. We follow this line of work by empirically testing one exemplary extraneous factor within the “enhanced APCO model” (antecedents–privacy concerns–outcome). Specific empirical tests on such biases are rare in the literature which is why we propose and empirically analyze the extraneous influence of a positivity bias. In our case, we hypothesize that the bias is induced by childhood brand nostalgia towards the Pokémon franchise. We analyze our proposition in the context of an online survey with 418 active players of the game. Our results indicate that childhood brand nostalgia influences the privacy calculus by exerting a large effect on the benefits within the trade-off and, therefore, causing a higher use frequency. Our work shows two important implications. First, the behavioral economics perspective on privacy provides additional insights relative to previous research. However, the effects of several other biases and heuristics have to be tested in future work. Second, relying on nostalgia represents an important, but also double-edged, instrument for practitioners to market new services and applications.
We study platform design in online markets in which buying involves a (nonmonetary) cost for consumers caused by privacy and security concerns. Firms decide whether to require registration at their website before consumers learn relevant product information. We derive conditions under which a monopoly seller benefits from ex ante registration requirements and demonstrate that the profitability of registration requirements is increased when taking into account the prospect of future purchases or an informational value of consumer registration to the firm. Moreover, we consider the effectiveness of discounts (store credit) as a means to influence the consumers’ registration decision. Finally, we confirm the profitability of ex ante registration requirements in the presence of price competition.