Behavioral Economics and Privacy Rights

Implications

We know that Facebook and similar services have achieved a critical mass which render them difficult to displace. Given the cumulative effect of the financial harms of centralized social network and the risks people assume from the presence of a middle man, a rational person should immediately delete their Facebook account. But they won't. We also know that Moglen and others are working on solutions which will provide these services with negligible privacy infringements. The choice of deleting Facebook and joining a different social network will need to be presented in such a way that results in gains for the individual and society despite the irrationality discussed above. For some group of people, like those who hold minority beliefs while living under authoritarian regimes, the potential harms are so great that they will make the switch irrespective of whether or not they suffer from the cognitive bias above. The important group of people then are those who live in first world countries for whom social networking is a resource for leisure and networking. To get these people to switch will be difficult, as they are endowed with services like Facebook and the privacy risks that come with them. First, they will need to be made to understand that rights to privacy can be unbundled and exist separately from the provision of social networking and other services. Freedombox might be most successful with the few people left who never have joined or are unaccustomed to using Facebook, as well as younger people who might be less fraught with the endowment effect. It will be up to these sorts of people to create the culture of privacy necessary to bring these harms to light and into the decision calculus for everyone else. These people will "anchor" themselves such that they are accustomed to rigorous privacy on the internet, and fight fervently for it in the future.

I’ll admit this was not a very useful or well developed inquiry and look forward to improving in a new draft, but in response to your comments for now:Perhaps insight from prospect theory does not change the fact social networking without a man in the middle is a good idea, but it may help us predict the way in which we can implement or “market” this new social network so that it can displace Facebook. The idea is not only, as you put it, “people allow their privacy to be invaded because there aren’t cheap, convenient ways to do what they want without giving up privacy,” it’s also “people allow their privacy to be invaded and they obviously shouldn’t even if there are not cheap, convenient alternatives. So when there are alternatives, how do we know people won’t continue to allow their privacy to be invaded?” Understanding why people act the way they do might help us present solutions like Freedombox framed in a way that will lead people away from continuing to make harmful decisions. The theory resonates with what you’ve said in class, that the shift to services like Freedombox will come first from a country in which people face much greater probabilities of severe harm (and therefore are able to internalize these harms), but the mechanism by which the first world will adopt these solutions still remains unclear to me. People will need to choose to adopt the alternatives that anarchism provides, and it’s not clear rationality will prevail. There might be something in a more nuanced and smarter application of behavioral economics than mine which gives us insight into how we can help people best frame this choice.