Sidewalk Labs: Privacy in a City Built from the Internet Up

Leslie  John; Mitch  Weiss

Teaching Note | HBS Case Collection | August 2019

Sidewalk Labs: Privacy in a City Built from the Internet Up

Abstract

Email mking@hbs.edu for a courtesy copy.

The case serves as a microcosm of issues of digital privacy: the availability of data – personal data in particular – has tremendous potential to improve people’s lives and commercial endeavors alike, but it also introduces a host of privacy perils. How can the benefits of this availability of personal data be realized while mitigating the pitfalls? Concern over firms’ use and misuse of consumers’ data has been increasing, fueling a debate surrounding the regulation of online privacy. In this case, students debate this question, and devise a framework of different approaches to resolving these issues.
The case provides a ripe area of inquiry for privacy issues: so-called “platform” companies, and especially platforms that run adjacent to, or even in public space. Cities are among the most ancient type of “platform,” providing a foundation for users of all types (individuals, organizations, companies) to interact, exchange, and innovate. Where platforms rely on users to generate and share data, privacy issues abound; Sidewalk Toronto is no exception.

Keywords: privacy; privacy by design; Privacy Regulation; platforms; data; data security; behavioral science; Data and Data Sets; Safety; Entrepreneurship; Business and Government Relations; Consumer Behavior;

Language: English

Format: Print

30 pages

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Citation:

John, Leslie, and Mitch Weiss. "Sidewalk Labs: Privacy in a City Built from the Internet Up." Harvard Business School Teaching Note 820-023, August 2019. (Email mking@hbs.edu for a courtesy copy.)

In the past decade, behavioral science has undergone beneficial shifts towards greater transparency and more rigorous research. However, we wondered whether this heightened focus on confirmation might make researchers feel inhibited towards doing research, and reduce the propensity to explore. Study 1 (N=404), a descriptive survey, indicated that relative to confirmatory research, researchers found exploratory research more enjoyable, motivating, and interesting; and less anxiety-inducing, frustrating, boring, and scientific. It also introduced a scale to measure research inhibition; higher scores were linked to running fewer studies and were particularly common among women, untenured professors, and receiving one’s PhD after 2011—when reforms began. Study 2 (N=463), a pre-registered experiment, indicated that a confirmatory mindset made researchers less likely to find an interesting (non-hypothesized) interaction. A reminder to explore did not mitigate this effect. These studies suggest that work is needed to ensure that rigorous scientific reforms and exploration can coexist.

Firms typically provide assurances to consumers about data management practices in the form of privacy notices. This manuscript proposes that ironically, such assurances can fuel rather than alleviate privacy concerns. Indeed, we show that consumers react to assurances as if they were warnings – a counterintuitive phenomenon because unlike warnings, which communicate danger, assurances are designed to communicate protection. Across one field experiment and five lab experiments, we show that a salient (vs. an absent or less salient) privacy notice can lead to decreased rather than increased purchase intent. This effect is mediated by consumer trust and is robust to the language in the privacy notice—it occurs even when the notice is overtly assuring, as well as when consumers see only a link to the notice but do not view its contents. The attenuation of the effect in joint (vs. separate) evaluation suggests that consumers’ hesitation to transact with organizations that have a salient privacy notice is not likely driven by an active aversion to assurances, but rather by the arousal of dormant privacy concerns.

Increasingly, consumers are taking self-photos and marketers, eager to capitalize on this trend, have been asking consumers to take self-photos with brands (i.e., brand selfies). We suggest that consumer compliance with such requests sparks a self-inferential process that leads the consumer to feel connected to the brand (e.g., “If I took the brand selfie, I must feel connected to this brand”), increasing brand preference. Eight studies support this account. In a dataset of 283,140 user reviews from Yelp, study 1 documented a positive association between a reviewer’s propensity to take a brand selfie and the star rating he gives the restaurant. Seven experiments point to causality: participants randomized to take brand selfies felt greater self-brand connection and exhibited heightened brand preference, relative to those randomized to take: no photo at all (study 2a), a selfie (without the brand; studies 2b-6), or a photo of the brand (without the self; study 3). Two studies point to process in convergent ways, via serial mediation (study 4) and moderated mediation (study 5). A final study documented a crucial moderator: dissatisfaction with one’s appearance in the selfie triggers defensive processing, reducing self-inference and thereby, the capacity for brand selfie-taking to increase brand preference.

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Sidewalk Labs: Privacy in a City Built from the Internet Up

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