Who Moved Firms' Cheese? Examining the Impact of End-Users Privacy Enhancing Technologies (PETs) on Firms' Analytics Capabilities
COM2 Level 4
Executive Classroom, COM2-04-02
Examiners: A/P Heng Cheng Suang and Assistant Professor Vaibhav Rajan
Abstract:
Information privacy is growing a social concern due to the vast amount of data being collected by firms who seek to reap benefits from the substantial value creation potential in personal information. To combat the threat of privacy invasion, individuals are proactively adopting privacy enhancing technologies (PETs) to protect their personal information due to the limited protection provided by privacy laws and firms' self-regulation. Increased adoption of end-user PETs could significantly affect firms' performances. This paper contributes to the stream of research on privacy and PETs by proposing an inductively derived framework to conceptualize the impact of end-user PETs on firms' analytics capabilities as mediated by the change in firms' data due to consumers' use of PETs. This framework shows that end-user PETs could induce measurement error and/or missing values with regards to attributes, entities and relationships in firms' databases. We conduct theoretical analysis using numerical simulation to examine the impact of the adoption rate of end-user PETs on firms' analytics capabilities. The results show that a high level of adoption rate of end-users PETs, over 10% in our benchmark setting, could lead to biased estimation. Furthermore, the sensitivity of estimation on adoption rate depends on the true data generation process, sample size, the extent of measurement error and/or the missing mechanism. The theoretical framework and numerical simulation results provide extensive implications for the practices and academics research.