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Innovation and Entrepreneurship Research

The Social Dilemma of Big Data: Donating Personal Data to Promote Social Welfare

Hillebrand, Kirsten; Hornuf, Lars (2021). The Social Dilemma of Big Data: Donating Personal Data to Promote Social Welfare, Max Planck Institute for Innovation & Competition Research Paper No. 21-08.

When using digital devices and services, individuals provide their personal data to organizations in exchange for gains in various domains of life. Organizations use these data to run technologies such as smart assistants, augmented reality, and robotics. Most often, these organizations seek to make a profit. Individuals can, however, also provide personal data to public databases that enable nonprofit organizations to promote social welfare if sufficient data are contributed. Regulators have therefore called for efficient ways to help the public collectively benefit from its own data. By implementing an online experiment among 1,696 US citizens, we find that individuals would donate their data even when at risk of getting leaked. The willingness to provide personal data depends on the risk level of a data leak but not on a realistic impact of the data on social welfare. Individuals are less willing to donate their data to the private industry than to academia or the government. Finally, individuals are not sensitive to whether the data are processed by a human-supervised or a self-learning smart assistant.

Also published as: CESifo Working Paper Series No. 8926