On the Adoption of Privacy-enhancing Technologies

We propose a model, based on the work of Brock and Durlauf, which looks at how agents make choices between competing technologies, as a framework for exploring aspects of the economics of the adoption of privacy-enhancing technologies. In order to formulate a model of decision-making among choices of technologies by these agents, we consider the following: context, the setting in which and the purpose for which a given technology is used; requirement, the level of privacy that the technology must provide for an agent to be willing to use the technology in a given context; belief, an agent's perception of the level of privacy provided by a given technology in a given context; and the relative value of privacy, how much an agent cares about privacy in this context and how willing an agent is to trade off privacy for other attributes. We introduce these concepts into the model, admitting heterogeneity among agents in order to capture variations in requirement, belief, and relative value in the population. We illustrate the model with two examples: the possible effects on the adoption of iOS devices being caused by the recent Apple-FBI case; and the recent revelations about the non-deletion of images on the adoption of Snapchat.