Behavioral Advertising: From One-Sided Chicken to Informational Norms

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Richard Warner and Robert H. Sloan · 15 Vand. J. Ent. & Tech. L. 49

Abstract


When you download the free audio recording software from Audacity, you agree that Audacity may collect your information and use it to send you advertising. Billions of such pay-with-data exchanges feed information daily to a massive advertising ecosystem that tailors website advertising as closely as possible to individual interests. The vast majority of consumers want considerably more control over our information. Consumers nonetheless routinely enter pay-with-data exchanges when we visit CNN.com, use Gmail, or visit any of a vast number of other websites. Why? And, what, if anything, should we do about it? We answer both questions by describing pay-with-data exchanges as a game of Chicken that we play over and over with sellers under conditions that guarantee we will always lose. Chicken is traditionally played with cars. Two drivers at opposite ends of a road drive toward each other at high speed. The first to swerve loses. We play a similar game with advertisers, with one crucial difference: we know in advance that the advertisers will never “swerve.”


In classic Chicken with cars, the players’ preferences mirror each other. When Phil and Phoebe face each other in their cars, Phil’s first choice is that Phoebe swerve first. His second choice is that they swerve simultaneously. Mutual cowardice is better than a collision. Unilateral cowardice is too, so third place goes to his swerving before Phoebe does. Collision ranks last. Phoebe’s preferences are the same except that she is in Phil’s place and Phil in hers. Change the preferences a bit, and we have the game we play in pay-with-data exchanges. Phil’s preferences are the same, but Phoebe’s differ. She still prefers that Phil swerve first, but collision is in second place. Given these preferences, Phoebe will never swerve. Phil knows Phoebe has these preferences, so he knows he has only two options: he swerves, and she does not; or, neither swerves. Since he prefers the first, he will swerve. Call this “One-Sided Chicken.”


We play One-Sided Chicken when in our website visits, we enter pay-with-data exchanges. We argue that buyers’ preferences parallel Phil’s, while the sellers’ parallel “collision second” Phoebe’s. We name the players’ choices in this pay-with-data game “Give In,” (the “swerve” equivalent) and “Demand” (the “do not swerve” equivalent). For buyers, “Demand” means refusing to use the website unless the seller’s data-collection practices conform to the buyer’s informational-privacy preferences. “Give In” means permitting the seller to collect and process information in accord with whatever information-processing policy it pursues. For sellers, “Demand” means refusing to alter their information-processing practices even when they conflict with a buyer’s preferences. “Give In” means conforming information processing to a buyer’s preferences. We contend that sellers’ first preference is to demand while buyers give in, and that sellers’ second preference is the “collision” in which both sides demand. Such demanding sellers leave buyers only two options: give in and use the site, or demand and do not use the site. Since buyers prefer the first option, they will always give in.


It would be better if buyers were not locked into One-Sided Chicken. Ideally, informational norms should regulate the flow of personal information. Informational norms are norms that constrain the collection, use, and distribution of personal information. We contend that such norms would ensure free and informed consent to businesses’ use of consumer data. Unfortunately, pay-with-data exchanges are one of a number of situations in which rapid advances in information-processing technology have outrun the slow evolution of norms. We argue that, in a sufficiently competitive market, the needed norms would arise if we had adequate tracking-prevention technologies.