Journal of Business Research 148 (2022) 174–189

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Journal of Business Research

journal homepage: www.elsevier.com/locate/jbusres

The more the better? Data disclosure between the conflicting priorities of
privacy concerns, information sensitivity and personalization in
e-commerce
Matthias H.J. Gouthier *, Carina Nennstiel , Nora Kern , Lars Wendel
Institute for Management, University of Koblenz-Landau, Universitaetsstrasse 1, 56070 Koblenz, Germany

A R T I C L E I N F O A B S T R A C T

Keywords: E-commerce companies are beginning to use data analytics to individually address their customers, as such firms
Data privacy are strongly dependent on customers’ willingness to disclose (WTD) personal information. Conceptually known
Situational privacy calculus as privacy calculus, a cognitive comparison of the predicted benefits and risks of such a disclosure results in
Personalization
subjective expected utility (SEU). As this construct has not been elucidated in the context of situational factors,
Information sensitivity
Subjective expected utility (SEU)
namely personalization and information sensitivity, this research utilizes a quantitative experimental study
Willingness to disclose personal information design to analyze these factors and evaluate the impact of SEU on customers’ WTD. Based on an online survey,
(WTD) the study reveals a positive but decreasing effect of personalization on SEU, while identifying information
sensitivity as a negative influential factor. In general, the results emphasize the importance of a fair and
transparent exchange relationship to foster a data disclosure setting without acute data privacy concerns.

1. Introduction
The e-commerce sector has seen significant growth in recent years,
emphasizing a clear shift from offline to online activities. Worldwide,
retail e-commerce sales have increased from USD 2.382 trillion in 2017
to an estimated USD 4.927 trillion by 2021 (Sabanoglu, 2020). With the
onset of the COVID-19 pandemic in 2020 and the associated changes in
general purchasing behavior, e-commerce trade has been experiencing a
surge in development (Monitor Deloitte, 2020).
While shopping online, customers leave traces in the form of sharing,
browsing, and behavioral data that companies can use to learn more
about customers and their needs. Furthermore, firms can exploit this
resource to design innovative digital marketing activities that create
new business value (Martin, 2016; Spiekermann, Acquisti, Böhme, &
Hui, 2015; Tucker, 2019).
Because of such lucrative opportunities, the collection, storage, and
usage of personal data in e-commerce have expanded, fueling a growing
area of conflict between companies and customers. Although an
increasing number of companies recognize the possession of usage-
based and personal customer information as a critical success factor,
customers are concerned about data security and their right to infor­
mational self-determination (e.g., Kokolakis, 2017; Kolotylo-Kulkarni,
Xia, & Dhillon, 2021; Wieringa et al., 2019). Such enhanced customer
privacy concerns are considered to influence online activities in e-
commerce (Bansal, Mariam, & Gefen, 2010; Eastin, Brinson, Doorey, &
Wilcox, 2016; Martin, 2016; Tucker, 2019; Wieringa et al., 2019). A
study from Accenture (2020) revealed that approximately 70% of con­
sumers are concerned about data privacy and commercial tracking
associated with their online activities, behaviors, locations, and in­
terests. However, another study conducted by them found that about
83% of consumers are willing to share their data in exchange for a
personalized customer experience (Accenture Interactive, 2018).
This observed tension between data privacy concerns and the desire
to receive more relevant and personalized offers is highlighted by a
paradox in the literature describing the dichotomy between customers’
general privacy concerns and actual disclosure behavior (Barth & de
Jong, 2017). Customers can reduce or solve this disjunction by applying
a cost–benefit evaluation to the prospect of information disclosure. The
underlying intrapsychological decision-making process by which one
assesses these uncertain future advantages (benefits) and disadvantages
(costs) is known as situational privacy calculus (Culnan & Armstrong,
1999; Laufer & Wolfe, 1977a; Wilson & Valacich, 2012). The resulting
evaluation of this trade-off between the expected benefits and costs of a
potential decision is referred to as the subjective expected utility (SEU).

* Corresponding author.
E-mail addresses: gouthier@uni-koblenz.de (M.H.J. Gouthier), cnennstiel@uni-koblenz.de (C. Nennstiel), noke@uni-koblenz.de (N. Kern), lars.wendel@web.de
(L. Wendel).

https://doi.org/10.1016/j.jbusres.2022.04.034
Received 31 March 2021; Received in revised form 14 April 2022; Accepted 18 April 2022
Available online 6 May 2022
0148-2963/© 2022 Elsevier Inc. All rights reserved.
M.H.J. Gouthier et al.
In the context of subjective decision-making, one compares the different
courses of action in terms of SEU, aiming to identify the alternative with
the highest expected value. Typically, a customer’s objective is not
solely to maximize the benefits, but also to attain the most attractive
trade-off between the two components that presents an acceptable level
of risk (Zhu, Ou, van den Heuvel, & Liu, 2017). In e-commerce, SEU is
characterized by a customer’s perception of the attractiveness of a
company-promised personalized communication measure, considering
the high level of uncertainty present in the form of data privacy risk (Li
& Sarathy, 2007). Based on this uncertainty and the evaluation of future
benefits, customers determine their willingness to disclose personal in­
formation (WTD) (e.g., Culnan & Bies, 2003). Although WTD has
already been the focus of several studies (e.g., Aiello et al., 2020; Kim &
Kim, 2018; Trang & Weiger, 2020), research has yet to consider how the
level of personalization applied in communication and offers affects
one’s WTD. As a result, there is a limited understanding of the extent to
which different levels of personalized content in marketing communi­
cations justify the collection of personal data in the customers’ eyes. An
overview of previous research and its key findings is given in Table 1,
showing great interest in the topic across disciplines and leaving space
for further investigation, especially regarding the relationship between
personalization, information sensitivity, and WTD.
Personalization is considered not only a general benefit but also a
situational incentive to influence the customer’s perception of data
disclosure. This categorization of personalization as a situational factor
is based on the assumption that it is re-evaluated individually depending
on the situation at hand (Li, Sarathy, & Xu, 2010; Wilson & Valacich,
2012). In addition, the sensitivity of the personal information requested
plays a central role in the decision-making process: the more sensitive
the data, the greater the perceived risk and the lower the expected value
customers associate with its disclosure (Mothersbaugh, Foxx, Beatty, &
Wang, 2012). Higher information sensitivity creates a disparity between
the expected costs and benefits of information disclosure, which is
considered again in the context of situational privacy calculus. The main
issue is that current research on situational privacy calculus does not
differentiate personal information in terms of information sensitivity,
meaning that the actual weight of this situational influence remains to
be adequately analyzed.
Customers also draw on prior experiences to validate their decisions
regarding WTD (Campbell, 1997). The perceived fairness of similar
exchanges in the past plays a role in Internet users’ information privacy
concerns (IUIPC). As concerns based on previous experiences are
generally considered an appropriate addition to situational privacy
calculus, IUIPC can be seen as a contextual factor that may influence a
customer’s decision (Campbell, 1997; Xu, Dinev, Smith, & Hart, 2008).
Going beyond the purely cognitive comparison of the expected
benefits and costs embodied in SEU, this study evaluates how the
measure is affected by situational factors (i.e., personalization and in­
formation sensitivity) and IUIPC as a context-based factor. Thus far,
there has been a lack of empirical evidence regarding a corresponding
privacy calculus that considers the degree of information sensitivity and
level of personalization promised in a specific situation (e.g., Barth & de
Jong, 2017; Kokolakis, 2017). Therefore, we employed a scenario-based
experimental design to fill these research gaps, simulate a newsletter
subscription, and apply a structural equation modeling (SEM) approach
supplemented by a group comparison. By analyzing these situational
factors, we aim to provide companies with innovative insights into how
to increase customers’ WTD, thus allowing personalized and individu­
alized communication in e-commerce.
Considering the aforementioned gaps in the literature, we set four
research goals: (1) to understand how personalization as a situational
factor affects SEU in e-commerce, (2) to analyze how information
sensitivity as a second situational factor influences SEU, (3) to test the
impact of IUIPC on SEU, and (4) to investigate the effect of SEU on WTD.
To fill these gaps, this research not only answers previous calls to learn
more about situational factors of privacy calculus (i.e., Kokolakis, 2017;
175
Journal of Business Research 148 (2022) 174–189
Ioannou, Tussyadiah, & Lu, 2020; Morando, Iemma, & Raiteri, 2014;
Nissenbaum, 2010), but also contributes to the evolving literature on the
privacy paradox by exploring customer privacy issues.
2. Conceptual foundations and hypotheses
2.1. Privacy concerns in the context of e-commerce
Companies collect an increasing amount of data to better understand
their customers; information on elements such as behaviors and atti­
tudes allows them to optimize digital customer experiences in e-com­
merce accordingly (Spiekermann et al., 2015; Tucker, 2019). While
some data are publicly available, such as those found on social media
channels, other types of digital interactions between a company and its
customers require that customers consent to the storage and use of their
data. However, customers are increasingly concerned about disclosing
their data online as this entails an invasion of privacy (e.g., Kokolakis,
2017).
In the digital age, the term ‘privacy’ is primarily applied in the
context of data use and associated data protection. Acquisti, Taylor, and
Wagman (2016) described privacy as a customer’s control over the
sharing of data, while Waks (1989) asserted that privacy means being
able to protect personal and sensitive information against misuse.
Protecting personal information becomes increasingly difficult in an
online environment—mainly because of the growing possibilities
offered by data collection, analytics, and storage—as customers develop
deepening concerns about their privacy. Privacy concerns in the context
of communication measures focus on so-called “informational privacy”
(Holvast, 1993; Kokolakis, 2017; Rosenberg, 1992). This level of privacy
is based on the right to informational self-determination. It considers the
prerogative of individuals to determine whether and how their data are
collected, stored, and processed, which is particularly important in e-
commerce (Holvast, 1993; Rosenberg, 1992). Customers perceive per­
sonal information to differ in their intimacy depending on the sensitivity
of the collected data (Mothersbaugh et al., 2012). Although control over
all kinds of information is required (Fried, 1984), researchers agree that
the more intimate the information, the deeper the intrusion into per­
sonal rights and the more critical it is to protect them (Lwin, Wirtz, &
Williams, 2007). Generally, privacy concerns can be regarded as atti­
tudes toward informational privacy. As in theory, attitudes serve as
reliable predictors of behavior, and it can be inferred that individuals
with positive attitudes toward informational privacy (minor privacy
concerns) are more likely to disclose data than those with negative at­
titudes (serious privacy concerns).
2.2. Situational privacy calculus
Despite harboring general privacy concerns and being aware of the
associated risks, customers often disclose personal data online and make
little active effort to protect it (Norberg, Horne, & Horne, 2007). This
discrepancy between attitudes and behaviors concerning data protection
is known as the (information) privacy paradox (Belanger & Crossler,
2011; Kokolakis, 2017; Norberg et al., 2007; Smith, Dinev, & Xu, 2011).
When consumers are asked directly about sharing data, their risk
perception will, for the most part, lead them to reject the prospect.
Nevertheless, when involved in a digital marketing exchange that de­
pends on sharing personal data, individual behavior shows no clear
consistency with the expressed attitude, which means that personal data
are often actively disclosed (Norberg et al., 2007). Wilson and Valacich
(2012) employed privacy calculus as a theoretical basis to explain this
phenomenon and solve the paradox.
To understand privacy calculus, privacy is viewed as an economic
good that can be traded for certain benefits, such as personalization or
financial or social rewards (Bennett, 1995; Wilson & Valacich, 2012).
Customers consider these positive outcomes along with any adverse
consequences of disclosing personal data in terms of their privacy, such
M.H.J. Gouthier et al. Journal of Business Research 148 (2022) 174–189

Table 1
Literature review.
References Methodology Topic/Context Focus and main findings

Aiello et al. (2020) Mixed-method design (focus group, • Privacy concerns as a feeling of - Different levels of perceived warmth alleviate privacy concerns
online experiment, laboratory vulnerability - Asking for personal information at the end of a customer journey
experiment) • Role of perceived warmth leads to higher perceived warmth and lower privacy concerns
Bansal et al. (2010) Lab experiment • Personal health information - Role of personal dispositions in information disclosure (e.g.
health state, experience, culture)
- A strong significant impact of personal dispositions on factors
determining privacy concerns, trust, and disclosure behavior
Barth and de Jong Systematic literature review • Privacy paradox - Discrepancy between attitude and behavior
(2017) - User’s decision-making process is generally driven by two con­
siderations: (1) risk–benefit evaluation and (2) risk assessment
deemed to be none or negligible
- Irrational decision-making: act on intuition rather than a precise
trade-off
- Context-dependency of the privacy paradox
Eastin et al. (2016) Quantitative (Online survey) • Mobile commerce activities - Theoretical foundation of communication privacy management
• Privacy concerns of mobile users (CPM)
- Privacy concerns are formed by collection, control, awareness,
unauthorized secondary use, improper access, location tracking,
trust, and attitude
- Control, unauthorized access, trust, and attitude significantly
predicted 73% of the variance in mobile activity
- Concerns about perceived control and unauthorized access to
personal information as a negative influence on mobile activity
Ioannou et al. Model testing by online survey • Travelers’ online privacy concerns (TOPC) - Testing of a proposed theoretical model explaining antecedents
(2020) and willingness to share information and outcomes of TOPC
- Results extend the Antecedents – Privacy Concerns – Outcomes
(APCO) framework by individual factors that shape TOPC
- Context-dependence of privacy preferences
- Travelers have privacy concerns, but they are still willing to
share their behavioral data
- Case of biometric information: the disclosure decision is
dependent upon expected benefits rather than privacy concerns
Kim and Kim (2018) Quantitative (Online survey with a • Recommendation systems - Perceived benefits, convenience, and vulnerability have no
YouTube experience) • Five distinct types of information significant effects on WTD
- Perceived severity → WTD: positive significant effect
- Coping efficacy → WTD: positive effect (except for feedback
information)
- Self-efficacy: positive effect only on disclosing feedback
information
Kokolakis (2017) Literature review (interpretations, • General privacy concerns - Inconsistency of privacy attitude and behavior: paradox
different contexts, • Sharing information for relatively small - Need for further research
conceptualizations) rewards - Call of synthetic studies: diversity of personal information and
concerns
- Evidence of actual behavior (not self-reported)
Li et al. (2010) Experimental study design • Effects of competing situational benefits - Information disclosure as the trade-off of exchange benefits and
and risk factors on information disclosure two types of privacy beliefs (privacy protection belief and pri­
• E-commerce transaction vacy risk belief)
- The monetary reward effect is dependent upon the fairness of
information exchange
Morando et al. Literature review • Users’ valuation of personal data - Valuation of personal data dependent on contextual aspects, e.g.
(2014) creating conflicts between declared and revealed preferences
- Data portability as an enabler to increase consumer
empowerment
Mothersbaugh et al. Online experiment (fictional online • Antecedents of information disclosure, - Usage of prospect theory
(2012) TV program) including information sensitivity - Analysis of WTD in an online service context
- Higher information sensitivity → weaker effects on
customization benefits, but stronger effects of information
control and privacy concerns
- Customization benefits can overcome the negative effects of
sensitive information requests when concern is lower or control
is higher
- Suggestion to include information sensitivity as a moderator
- Privacy paradox may result from a failure to account for
information sensitivity
Trang and Weiger Questionnaire-based field study • Use of gamification to increase users’ WTD - Engaging with gamified apps influences the situational
(2020) processing or privacy issues and related disposition
- State of deep cognitive absorption: disclosure of more
information when there is a higher perception of privacy benefits
Wieringa et al. Literature review • Data analytics and privacy concerns - Specification of different functions in the context of data
(2019) analytics and privacy and their comparison on different levels
(customer, intermediary, firm)
- Identification of five responsibilities for personal data and
analytics (data collection, data verification, data storage, and
control; deriving insights; and disseminating insights)
(continued on next page)

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Table 1 (continued )
References Methodology Topic/Context Focus and main findings

- Increasing the role of customers relative to responsibilities can

Wilson and Valacich Development of a theoretical model
(2012) and application of experimental
design
Xu et al. (2008) Development of an integrative model
and its verification using a survey
Xu, Luo, Carroll, Experimental design
Rosson (2011)
Zhu et al. (2017) Application of utility model
• Disclosure behavior and potential
irrational behavior
• Fragmented understanding of privacy
• Model testing with four types of websites
(e-commerce, social network, financial,
and healthcare)
• Location-aware marketing (LAM)
• Personalization of services and
information disclosure
alleviate privacy concerns
- Consumers take on more personal data responsibilities: need to
be better equipped to investigate data veracity
- Customers should be more involved in data storage and control
- Actual behavior might be overridden by situational factors
- Decision-making is not fully rational
- Discipline-dependent understanding of privacy
- Integration of information boundary theory and cognitive
processing
- Individual disposition to privacy and situational cues
- Importance of perceived privacy control
- Disposition to value privacy as an important predictor of privacy
risk
- Social norm as a predictor to value privacy
- Privacy concerns in the context of location-aware marketing
- Including personal characteristics and two types of
personalization approaches: overt & covert
- Variation in types show different influences of personalization on
trade-off, mediated through personal characteristics
- Relative value and utility of private/personal information
- Contradiction between privacy and personalization
- Introduction of a utility model based on multi-attribute utility
theory (MAUT)
- Significant distinctions of calculating benefits and costs among
three groups of consumers

as the risk of data misuse (Dinev & Hart, 2006; Hann, Hui, Lee, & Png,
2007; Laufer & Wolfe, 1977b). Researchers classify this relationship as a
cost–benefit calculation or cognitive risk–benefit comparison (Culnan &
Armstrong, 1999; Laufer & Wolfe, 1977a).
According to the Homo economicus theory, individual customers
strive to maximize the benefits of their behavioral decisions (Culnan &
Bies, 2003). A precise understanding of the trade-off between future
costs and benefits is crucial for achieving this objective. The result of this
evaluation is seen as the rational foundation for decision-making in the
context of protecting one’s data. When a customer evaluates an oppor­
tunity, the anticipated benefits of the resulting decision should be higher
than the feared costs; extended to several alternatives for action, the
decision would always fall on the option expected to have the highest
value (Culnan & Bies, 2003; Gerber, Gerber, & Volkamer, 2018). This
assumption is in line with SEU theory, which aims to maximize the
positive difference between the expected benefits and costs of an alter­
native (Zhu et al., 2017).
Research has applied the evaluation of privacy calculus to several
digital contexts and identified various benefits (e.g., Culnan & Bies,
2003; Dinev & Hart, 2006; Hann et al., 2007; Li et al., 2010) that can
generally be classified as financial, functional, psychological, or social
(e.g., Bennett, 1995; Schiffman, Kanuk, & Hansen, 2008; Wilson &
Valacich, 2012). Some of the most important benefits of e-commerce are
personalization, convenience (via shortened search time), and discounts
(Zhu et al., 2017). These benefits are also seen as opportunity costs for
data non-disclosure (Acquisti et al., 2016). In exchange for these bene­
fits, there are costs to be paid, some of which are difficult to grasp. The
costs often entail a certain perceived risk and include negative conse­
quences in the case of data disclosure, such as losing possession of one’s
personal information, facing social criticism or denigration, or having
one’s data used for other unspecified purposes, such as data crime (Barth
& de Jong, 2017; Gerber et al., 2018; Wilson & Valacich, 2012).
Based on the fundamental ideas of privacy calculus, recent literature
has emphasized the importance of situational privacy concerns (e.g.,
Acquisti, 2004; Li et al., 2010). For example, Wilson and Valacich (2012)
highlighted the relevance of situational factors for decisions in the
context of data privacy as such details can exert a significant influence
on expected benefits or costs and thus the cost–benefit evaluation.
Accordingly, they proposed the term “situational privacy calculus”
(Wilson & Valacich, 2012). This term assumes that the trade-off between
anticipated gains and losses depends on situational circumstances and
influences that ultimately form behavioral intentions. Furthermore,
dispositional factors such as social norms and attitudes can influence the
outcome of situational privacy calculus (Acquisti & Grossklags, 2005;
Wilson & Valacich, 2012).
2.3. Subjective expected utility
In e-commerce, following the theory of situational privacy calculus,
an interactive negotiation between customers and companies about
disclosing certain information occurs. In general, customers have two
distinct alternatives for action: accepting the disclosure of their data to
receive certain benefits, such as personalized offers and communication,
or rejecting it, and thus abstaining from said benefits. A further sub-form
of data disclosure can be seen in the concrete adjustment of data-sharing
preferences, which typically occur when setting cookie preferences on
websites. However, because this sub-form is irrelevant to our specific
application field of newsletters, it will not be considered further.
The choice of action alternative depends on the customer’s subjec­
tively expected costs and desired benefits, whether the alternative is
associated with a positive or negative value. The information disclosure
agreement (action alternative 1) assumes, as a consequence, that various
types of information will be disclosed in exchange for expected benefits
provided by the company. With the rejection of data disclosure (action
alternative 2), the consequence is that the data remain protected, but the
customer receives no benefits. In this study, situational privacy calculus
is operationalized by the SEU. Following SEU theory, the action alter­
natives identified are assessed based on their action consequences (Zhu
et al., 2017). Consequences of action are defined as all states that can
result from the choice of an option (based on March, 1994). For
example, the action consequences can be represented and assessed by
the disclosure of different pieces of information that result from agreeing
to an action alternative. However, because the action consequences are
never expected with absolute certainty, it is insufficient to judge the
action alternatives using their consequences alone. Therefore, the sub­
jective probability of consequences occurring is also considered. Thus,
the consequences of action do not carry as much weight—positive or
negative—if they are assessed to have a low probability of occurring.

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M.H.J. Gouthier et al.
Accordingly, utility and uncertainty represent two central SEU
variables.
Because situational privacy calculus is investigated, it is crucial to
consider the various factors influencing the situation itself, and thereby
the cost–benefit calculation and resulting SEU.
2.4. Factors influencing the situational privacy calculus
In creating positive customer experiences in e-commerce, the
perception of benefits often depends on the expected level of personal­
ization. By contrast, the perception of costs is largely determined by the
sensitivity of the information to be disclosed (Kim & Kim, 2018).
Therefore, companies tend to use personalization of content as an
incentive to increase the perception of benefits and justify the collection
of sensitive data (Culnan & Armstrong, 1999; Morosan & DeFranco,
2015; Wirtz & Lwin, 2009). Both personalization (e.g., Xu, Luo, Carroll,
& Rosson, 2011) and information sensitivity (e.g., Li et al., 2010;
Sheehan & Hoy, 2000) are essential situation-specific factors that in­
fluence privacy calculus.
The level of personalization can be expressed in terms of differenti­
ation in online communication with the customer and categorized into
three forms (Fan & Poole, 2006; Vesanen, 2007). First, mass marketing
represents the zero level of personalization, as this strategy involves no
differentiation in customer communication. This is known as standard­
ized communication. Second, personalized customer communication
involves a superficial understanding of the customer, which makes it
possible to address the customer by name. Third, an even higher level of
personalization involves individualized communication. The content
can be adapted to the customer’s needs because the company has a
deeper data-driven understanding of the customer (e.g., Fan & Poole,
2006). With any form of personalization, customers’ perceived benefits
from the incentive are based on subjective evaluations gleaned by
comparing the benefits with their motives and goals (Xu et al., 2011;
Wilson & Valacich, 2012). In addition, potential benefits can only be
anticipated, as there is a time-lagged causality between disclosure and
the resulting benefits. Personalization can thus be understood as an
experience good (Ford, Smith, & Swasy, 1988) as its benefits can only be
evaluated while consuming personalized communication measures. This
means that the situational evaluation of benefits and costs underlies
customer subjectivity and uncertainty. Because personalization in the
context of this study is assumed to be a situational factor influencing
SEU as a potential benefit (Chellappa & Sin, 2005; Wieringa et al.,
2019), we propose the following hypothesis:
H1: The higher the level of personalization, the higher the subjective ex­
pected utility (SEU).
However, the level of personalization depends on the breadth and
depth of the information available to companies (Awad & Krishnan,
2006). This means that online communication can only achieve a high
level of personalization if the customer provides the company with
required information. However, information disclosure and the associ­
ated loss of control over one’s data are perceived as risks owing to
general privacy concerns. These risks are reflected in the cost of the
situation-specific cost–benefit calculation, with the expected costs
depending on the sensitivity of the information required. Prior studies
have repeatedly addressed and operationalized the relevance of infor­
mation sensitivity (e.g., Bansal et al., 2010; Kim & Kim, 2018; Mother­
sbaugh et al., 2012; Phelps, Nowak, & Ferrel, 2000; Xie, Teo, & Wan,
2006). In general, customers tend to attribute greater sensitivity to
financial or health information than to general or lifestyle-related in­
formation or information related to shopping habits and preferences
(Gabisch & Milne, 2014; Smith et al., 2011). The perceived sensitivity of
information depends mainly on its specificity and whether an intrusion
into personal rights accompanies its disclosure (Nowak & Phelps, 1992).
More sensitive data are then associated with higher costs and thus might
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Journal of Business Research 148 (2022) 174–189
reduce the subjective expected utility (Malhotra, Kim, & Agarwal,
2004). Accordingly, we propose the following hypothesis:
H2: The higher the degree of information sensitivity, the lower the sub­
jective expected utility (SEU).
Another aspect that should be considered when examining situa­
tional privacy calculus is IUIPC, which arises from a consumer’s general
attitude toward informational privacy. IUIPC consists of three di­
mensions: the user’s concerns about collecting personal information
from companies in the online context, user’s control over the informa­
tion collected, and user’s awareness of how companies use that infor­
mation (Malhotra et al., 2004). As soon as customers find themselves in
a situation in which they must weigh the risk of data disclosure, they
draw on prior experience to compare the current situation with a similar
decision-making situation in the past. In informational privacy, attitude
depends on previous experiences regarding perceived fairness in ex­
changes of this kind (Campbell, 1997). As more significant concerns
about information privacy can be expected to negatively affect cost-
benefit evaluations (Kim & Kim, 2018; Martin & Murphy, 2017), we
derive the following hypothesis:
H3: The greater the Internet users’ information privacy concerns (IUIPC),
the lower the subjective expected utility (SEU).
2.5. Willingness to disclose personal information
Overall, the outcome value of the SEU indicates whether one de­
termines the situation-specific cost-benefit trade-off to be positive or
negative and how likely it is to consider the potential consequences of
the evaluated action (Campbell, 1997). According to privacy calculus
theory, an individual opts for disclosure if the exchange is perceived as
positive, with the expected benefits exceeding the costs, and against
disclosure if the anticipated costs of disclosure exceed the benefits
(Culnan & Bies, 2003). It can also be assumed that the situational pri­
vacy calculus operationalized by the SEU influences customers’ WTD
(Trang & Weiger, 2020). Hence, we propose the following hypothesis:
H4: The higher the subjective expected utility (SEU), the greater the
willingness to disclose personal information (WTD).
The research model depicted in Fig. 1 summarizes the hypothesized
relationships and serves as the conceptual basis of the empirical study.
3. Methodology
This study employed a scenario-based research design to test the
hypotheses. To empirically investigate the effects of situational factors
and IUIPC as a contextual factor on SEU, as well as the impact of SEU on
customers’ WTD in the e-commerce context, the given scenarios utilized
newsletter subscriptions as a concrete measure for companies to
communicate with customers in a personalized manner.
3.1. Research design
We chose to conduct our study in the application field of a newsletter
subscription because it allows for realistic testing of different levels of
personalization and different degrees of information sensitivity.
Furthermore, it offers practical applicability and relevance, as e-mail
marketing is critical in e-commerce (e.g., Hudák, Kianičková, &
Madleňák, 2017). We employed a 3 × 2 between-subjects design,
manipulating the level of personalization (standardized, personalized,
or individualized) and degree of information sensitivity (low vs. high).
The study was conducted as an online survey in which participants were
randomly assigned to one of six groups and confronted with a text
describing a privacy-compliant newsletter subscription.
M.H.J. Gouthier et al.
Fig. 1. Conceptual model.
We applied a scenario-based evaluation to determine how re­
spondents perceived the promised newsletter content regarding the
personal data to be disclosed. The introduction of the scenario-based
survey presented participants with specifics regarding the intended
data collection to put themselves in the respective situation and un­
derstand what was at stake (Shearer, 2004). The level of personalization
was reflected in three different scenario descriptions reporting the
benefits that participants could expect from disclosing information in
the course of a newsletter subscription. The benefits increased according
to the level of personalization (standardized, personalized, and indi­
vidualized). Whereas standardization means sending out a newsletter in
the sense of a mass marketing approach without any personalized in­
formation, a personalization approach entails sending customer news­
letters with segment-specific communication. It offers targeted
communication to the customer group to which they have been assigned
based on their shared information. Individualization goes a step further,
with communication and offers tailored to an individual’s interests and
needs. In general, personalization constructs a superficial understanding
of customers (e.g., knowing their names), while individualization is
more in-depth in incorporating individual needs and behavior based on
the data collected (Fan & Poole, 2006; Vesanen, 2007).
The two groups assigned to each of the three personalization sce­
narios differed regarding the second manipulation of information
sensitivity, namely, the type of personal information to be disclosed. The
use of information sensitivity in our experimental study design was
based on the categorization of potential information to be disclosed,
given in Mothersbaugh et al.’s (2012) previously validated findings. The
information items were divided into eight categories, which were
mapped to two to five items each. The category “website perception”
was not applicable in our context because no simulation of a company’s
website was presented to the participants. Therefore, this category was
eliminated. The items of the remaining seven categories were then split
into two roughly equal sets according to the factorial design for this
study, such that one study group shared information with lower sensi­
tivity. Simultaneously, the other group was requested to share more
sensitive personal information. Contact, financial, and demographic
information about the family circle represented sensitive data. On the
other hand, less sensitive data included demographic information about
oneself, media usage, and information concerning one’s lifestyle and
leisure time in both the online and offline contexts. Participants
responded to questions regarding their willingness to disclose each piece
of information.
3.2. Sample
Based on the manipulation of personalization and information
sensitivity, we created a 3 × 2 factorial design consisting of six groups of
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Journal of Business Research 148 (2022) 174–189
approximately 50 participants each. During the survey period, we
collected 306 data sets using an online questionnaire distributed in
Germany via the university network and other online portals (e.g., social
networks). We offered no incentives for participation. Owing to the
application field of a newsletter subscription and, more generally, the e-
commerce context, participants had to be at least 16 years of age.
However, as we set no further restrictions on participation or specific
selection procedures for the sample, we assumed random selection. This
random selection was maintained in the assignment of participants to
the survey scenarios, which will be specified in greater detail in the data
analysis.
At the beginning of the survey, we checked whether participants
displayed an adequate level of personal involvement in online data
protection. Examining the data records revealed that six had an
involvement score below the threshold of 3.0, which was deemed to be
sufficient; these six records were then eliminated to ensure validity.
Another record was removed because of its very short processing time,
leaving an effective sample of 299 data records. Of these, 45.2% were
female, 54.5% were male, and 0.3% declined to indicate their gender.
Furthermore, there was a balanced distribution of female and male
participants among the six study groups. In terms of age, the respondents
were between 16 and 72 years, with an average age of 33.13 years.
3.3. Measures
When operationalizing the latent variables, we primarily used
existing validated scales. To check whether the participants generally
engaged in online data privacy, we used involvement as a control var­
iable, operationalized according to a revised version of Zaichkowsky’s
(1985) personal involvement inventory. The measurement of this vari­
able entails the use of a semantic differential on a seven-point Likert
scale.
The central construct of the study is expressed in the SEU, as it
represents the result of a cognitive evaluation of situation-specific costs
and benefits, thus operationalizing situational privacy calculus. The
consequences include the trade-off between personalization as a positive
consequence to be expected and the potential risk or costs one perceives
as being associated with disclosing personal data.
Generally, SEU is calculated using a product sum model, including
the product value of the subjective assessment of the alternative eval­
uation and its probability of occurrence for each consequence of an
action alternative. The sum of these results is the SEU of the action
alternative Hi (Kunz, 2004; Nau, 2006):
∑
SEU(Hi ) = Uij *pij
j
Uij is mapped as the subjective evaluation of action consequence j for
M.H.J. Gouthier et al.
action alternative i. Low evaluations would mean high costs or negative
consequences for revealing information, while high evaluations indicate
expected benefits or positive consequences from the decision-maker’s
point of view. The other element, pij, represents the subjectively assessed
probability of occurrence for action consequence j of action alternative i.
For each scenario in our study, we assessed customers’ perceptions of
the sensibility to disclose specific information in exchange for the ex­
pected action consequence. Uij is metrically operationalized as rational
and monopolar on a scale of 0 to 10. This scale allows for not only
statements about equal distances of ratios but also the setting of a nat­
ural zero point; a score of 0 means that the respondent evaluates the
action consequence of disclosure to be entirely negative, and 10 in­
dicates an entirely positive evaluation, going hand in hand with the
benefits that are pledged as an incentive in the survey. The scale was
normalized to an interval of 0 to 1.
The uncertainty measure (pij) tracks the subject’s probabilistic
assessment of the extent to which the disclosure will be used for the
purpose described in the scenario, and ranges from 0 (not certain at all;
0%) to 10 (absolutely certain; 100%). Therefore, the subjective proba­
bility of occurrence of the assessed action consequences was surveyed.
To calculate the SEU, the scale was normalized to an interval of 0 to 1.
Based on the arithmetic mean for Uij and pij determined by metric
scaling, the overall net value of disclosure was calculated for all infor­
mation items given.
In addition, context-specific dispositions of informational privacy
can be represented as IUIPC, which, as a second-order construct, inte­
grate the dimensions of control, awareness, and collection (Malhotra
et al., 2004). We measured the dimensions on discrete, seven-point
Likert scales, with three items each to measure control and awareness
and four items for collection. WTD items were recorded on a four-point
Likert scale (never willing, not very willing, somewhat willing, always
willing) adopted from Phelps et al. (2000). Unlike the other constructs in
this study, for WTD, it seemed reasonable to omit a middle category and
thereby elicit an expression of at least a tendency toward the (non)
disclosure of personal information. Furthermore, as there were only two
possibilities in each scenario (disclosure or non-disclosure), the ten­
dencies given could help better classify actual behavior.
Fig. 2. Boxplot of information sensitivity (manipulation check).
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Journal of Business Research 148 (2022) 174–189
4. Results
4.1. Manipulation check
Because of the study’s experimental design, it was essential to check
whether the manipulation of the two situational factors—information
sensitivity and personalization—was successful and led to the corre­
sponding effects in the respective study groups. First, the manipulation
of information sensitivity was implemented in such a way that half of the
groups had to evaluate the disclosure of a set of personal information
with a lower degree of sensitivity, while the other groups had to do the
same with more sensitive data. We expected the SEU evaluation to be
more positive for the former than for the latter. The manipulation can be
proven via the boxplot representation of the corresponding effects in
Fig. 2, which serves as a graphical overview of the distribution of the
variable to be able to assess, for example, the dispersion and corre­
sponding outliers.
These results reveal a lower dispersion of the measured values and
higher SEU of the quartiles with low information sensitivity than those
with high sensitivity.
Second, the manipulation of personalization was implemented in a
way that there were three groups, each evaluating a scenario of a
newsletter description with different levels of personalization (stan­
dardized, personalized, individualized) as an expected benefit of infor­
mation disclosure. As highlighted by the boxplot depicting the effects of
personalization, greater dispersion can be observed with increasing
levels of personalization, each of which has higher utility values.
Simultaneously, the groups with standardized communication exhibited
a more homogeneous distribution, with few exceptions. This finding is
supported by the results shown in Fig. 3.
Grouped by personalization level, with both low and high informa­
tion sensitivity combined, the situation measure increases overall as
personalization increases, allowing us to assume a generally successful
manipulation.
M.H.J. Gouthier et al. Journal of Business Research 148 (2022) 174–189

Fig. 3. Boxplot of personalization levels (manipulation check).

Table 2
Latent variables, items, and indicator loadings.
Second-order First-order construct Items Indicator α
construct loadings

Level of personalization (own Scenarios of subscription to [1] standardized, [2] personalized, and [3] 1.000
operationalization) individualized newsletters
Information sensitivity (based on Low information sensitivity: marital status, first/last name, date of birth, gender, 1.000
Mothersbaugh et al., 2012) education level, monthly online purchases, weekly internet usage, hobbies,
brands/products, newspapers/magazines/books, favorite shows
High information sensitivity: private phone number, work phone number, mobile
phone number, postal address, fax number, credit card number, credit card
expiration date, yearly income, number of employed household members, number
of family members
IUIPC (Malhotra Control Consumer online privacy is really a matter of consumers’ right to exercise control 0.870 0.703
et al., 2004) and autonomy over decisions about how their information is collected, used, and
shared.
Consumer control of personal information lies at the heart of consumer privacy. 0.790
I believe that online privacy is invaded when control is lost and unwillingly 0.712
reduced as a result of a marketing transaction.
Awareness Companies seeking information online should disclose the way the data are 0.842 0.745
collected, processed, and used.
A good consumer online privacy policy should have a clear and conspicuous 0.767
disclosure.
It is very important to me that I am aware of and knowledgeable about how my 0.830
personal information will be used.
Collection It usually bothers me when online companies ask me for personal information. 0.817 0.852
When online companies ask me for personal information, I sometimes think twice 0.787
before providing it.
It bothers me to give personal information to so many online companies. 0.908
I’m concerned that online companies are collecting too much personal information 0.817
about me.
Subjective expected utility (own Consequence of action: How would you rate the disclosure of the following 1.000
operationalization based on Kunz (2004); Nau information in relation to the described scenario? (0 = entirely negative
(2006)) consequence; 10 = entirely positive consequence)
Probability of occurrence/uncertainty: How likely do you think it is that the
disclosure of the respective information will be used for the purpose of the above-
mentioned scenario? (0 = not certain at all; 10 = quite certain)
Willingness to disclose personal Please indicate your willingness to provide the following information to the online 1.000
information (Phelps et al., 2000) company (four-point scale: always willing, somewhat willing, not very willing, never
willing)

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M.H.J. Gouthier et al.
4.2. Data analysis and results
We applied partial least squares structural equation modelling (PLS-
SEM) to analyze the data collected and test our hypotheses. This method
has been gaining popularity in experimental research because it has
several advantages over other statistical techniques, such as the analysis
of variances (Breitsohl, 2019; Henseler, Ringle, & Sinkovics, 2009). PLS-
SEM provides a holistic approach for analyzing the effects and testing
hypotheses in experimental settings (e.g., Andrei, Zait, Vatamanescu, &
Pînzaru, 2017). Accordingly, we evaluated both manipu­
lations—personalization and information sensitivity— as ordinal vari­
ables (level of personalization with [1] standardized, [2] personalized,
and [3] individualized communication; information sensitivity with [1]
low sensitivity and [2] high sensitivity). Furthermore, we modeled
IUIPC as a type two (reflective–formative) second-order construct
(Jarvis, MacKenzie, & Podsakoff, 2003) consisting of three dimensions
(awareness, control, and collection). The underlying first-order con­
structs and their manifest variables are shown in Table 2, which also
depicts the associated items and respective indicator loadings.
We modeled and calculated the construct using the repeated indi­
cator approach with mode A measurements (Noonan & Wold, 1983;
Wold, 1982). Because of its lower constraints, we chose PLS-SEM over
covariance-based SEM approaches to estimate the model (Afthanorhan,
2013). We conducted the estimation using SmartPLS 3 by applying the
PLS algorithm and nonparametric bootstrapping (with 5,000 replica­
tions). First, we evaluated the quality of the measurement model by
verifying all required quality criteria (Hair, Sarstedt, Ringle, & Mena,
2012). The indicator reliability of the reflective scales could be ensured
as all standardized loadings exceeded the threshold of 0.7 (Hair et al.,
2012).
Furthermore, the composite reliability of all first-order constructs
was greater than 0.7, indicating internal consistency. As SEU and WTD
were calculated separately, the variables consisted of only one indicator,
resulting in a composite reliability of 1.0. Convergent validity can be
confirmed as the average variance extracted (AVE) exceeds 0.5 in all
cases (Fornell & Larcker, 1981). To assess discriminant validity, we used
the heterotrait-monotrait (HTMT) approach. The highest HTMT value
obtained was 0.807, which lies below the conservative threshold of 0.85,
thus indicating no lack of discriminant validity (Henseler et al., 2009;
Voorhees, Brady, Calantone, & Ramirez, 2016). Table 3 displays the
construct-level correlations and psychometric properties to present all
results in detail.
To assess the psychometric properties of IUIPC modeled as formative
at the second-order measurement level, we tested the significance of
indicators and multicollinearity to evaluate the measures’ goodness
(Chin, 2010; Goetz, Liehr-Gobbers, & Krafft, 2010). In terms of indicator
significance, the weights of the indicators forming the second-order
construct, represented by the path coefficients, exceeded the threshold
of t > 1.98, and thus signal significance on the 1% level (Chin &
Newsted, 1999). To evaluate the second-order hierarchical measure­
ment model, we assessed the degree of multicollinearity among the
formative indicators (Diamantopoulos & Winklhofer, 2001; Grewal,
Cote, & Baumgartner, 2004). The results revealed the highest value of
Table 3
Psychometric properties of variables.
Variable M SD CR AVE 1 2
1. IUIPC 5.497 0.823 0.879 n/a 1.000
2. Control 5.336 0.957 0.835 0.630
3. Awareness 6.124 0.739 0.854 0.662
4. Collection 5.488 1.027 0.901 0.695
5. Information sensitivity 0.046
6. Personalization 0.057
7. SEU 0.237 0.275 0.264
8. WTD 2.179 0.831 0.299
Note. M = mean; SD = standard deviation; CR = composite reliability; AVE = average variance extracted.
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Journal of Business Research 148 (2022) 174–189
1.679 for the variance inflation factor (VIF) of the second-order
construct, indicating that no multicollinearity was present (Henseler
et al., 2009). The overall measurement model resulting for the first- and
second-order constructs prove that the measurement model is suitable
for the analysis at the structural model level.
Second, we estimated the structural model, which shows that the
model fits the data well. Fig. 4 illustrates these results, showing all path
coefficients and the proportions of variances of the dependent variables.
The R2 values of SEU (0.484) and WTD (0.652) indicate that the up­
stream variables adequately explain the endogenous variables, whereas
Q2 values greater than zero for all endogenous variables indicate pre­
dictive relevance. We used the blindfolding procedure to verify the
predictive relevance, resulting in cross-validated redundancy values of
0.477 (SEU) and 0.647 (WTD).
Hypothesis testing revealed support for H1 as the level of personal­
ization showed a significant positive effect on SEU (β = 0.419, p <
0.001). The results also confirmed H2, which predicted the disclosure of
information with a higher sensitivity to harm SEU (β = − 0.504, p <
0.001). Supporting H3, IUIPC had a significant negative effect on SEU (β
= − 0.233, p < 0.001). Finally, concerning the outcome variable, WDT,
we found a strong positive effect of SEU (β = 0.807, p < 0.001). Hence,
H4 was also supported by the underlying data. The respective results are
underlined by the illustrations in Fig. 4 and Table 4, showing the SEM
and its respective key statistical figures.
4.2.1. Additional analysis
Although all the proposed hypotheses could be tested through SEM
analysis, the findings failed to consider the different experimental con­
ditions that were present. Therefore, we conducted an additional anal­
ysis of the group differences, which revealed further findings relevant to
the SEU. Consolidated across all groups, the SEU displayed a mean of
0.237 after normalization and a standard deviation of 0.275, repre­
senting a relatively low average of the calculated value. However,
looking at the position and scatter parameters of individual groups can
provide deeper information. To this end, Table 5 provides an overview
of each group and highlights their differences.
Groups 1 (n = 51) and 2 (n = 48) had the lowest mean SEU values
and standard deviations below 0.1 (G1: M = 0.087, SD = 0.093; G2: M =
0.048, SD = 0.087). These groups received a standardized newsletter
with the lowest level of personalization as a benefit. A significant dif­
ference was observed for Groups 3 (n = 50) and 4 (n = 50), who were
offered a medium level of personalization. Group 3 was confronted with
the disclosure of less sensitive information and presented a mean value
and dispersion that were notably higher (G3: M = 0.486, SD = 0.282).
Group 4 faced the disclosure of more sensitive information and showed
significantly lower SEU values (G4: M = 0.103, SD = 0.104). The results
for Groups 5 (n = 50) and 6 (n = 50) were similar to those of Groups 3
and 4 (G5: M = 0.554, SD = 0.270; G6: M = 0.142, SD = 0.167), indi­
cating only a minimal difference between individualized and personal­
ized communication as an incentive.
To test whether there were significant differences between the mean
values of the six groups and their effects on situational privacy calculus
(reflected in the SEU), we also carried out variance analytical
3 4 5 6 7 8
1.000
0.741 1.000
0.417 0.608 1.000
0.019 0.032 0.056 1.000
0.090 0.033 0.029 0.012 1.000
0.300 0.208 0.175 0.502 0.416 1.000
0.215 0.221 0.289 0.541 0.371 0.807 1.000
M.H.J. Gouthier et al. Journal of Business Research 148 (2022) 174–189

Fig. 4. Results of the SEM.

between the groups.

Table 4
To visualize the differences between groups, we performed an
Study results of SEM analysis.
additional pairwise comparison and tested the null hypothesis again for
Hypothesized path Hypothesis β SE t-value Supported each pair. The effect sizes were then calculated. The pairwise compari­
Personalization → H1 0.419 0.037 11.315*** Yes son confirmed a significant difference between standardization and
SEU personalization, as well as between standardization and individualiza­
Information H2 − 0.504 0.033 15.327*** Yes tion. However, the difference between personalization and individuali­
sensitivity → SEU
IUIPC → SEU H3 − 0.233 0.043 5.425*** Yes
zation was not significant, with only a marginal increase. The
SEU → WTD H4 0.807 0.033 24.289*** Yes calculation of the effect strength using the correlation coefficient r
*** clarified the finding: we found a moderately strong effect between
Note: p < 0.001; SE = standard error.
standardization and personalization (r = 0.455), a strong effect between
standardization and individualization (r = 0.545), and no sufficiently
procedures to compare mean values. The implementation of parametric strong effect for the non-significant relationship between personaliza­
procedures, such as two-factor ANOVA, requires a normal distribution of tion and individualization (r = 0.090). Although the test showed that the
data within the groups and homogeneity of the variances between the subjectively expected benefit was expressed differently based on the
groups (Ostertagová, Ostertag, & Kovác, 2014). As these preconditions level of personalization, there seemed to be a degree of saturation at
could not be confirmed through appropriate tests, our analysis called for which an additional enhancement in personalization did not lead to a
a nonparametric test procedure that presupposes nothing about distri­ significant perceived additional benefit for a customer. Whereas effect
butions: the Kruskal–Wallis test is recommended in such cases differences in the subjectively expected benefit could be identified from
(Ostertagová et al., 2014; Kruskal & Wallis, 1952). fully standardized to segment-specific communication, in the next step
to individualization, they were present but too marginal to formulate a
4.2.2. Level of personalization distinct statement.
A comparison of the mean ranks revealed a positive relationship
between the level of personalization and resulting SEU. However, while 4.2.3. Degree of information sensitivity
there was a massive leap in SEU from offering a personalized newsletter To test group differences in terms of information sensitivity, we
as an incentive (mean rank = 170.86) instead of a standardized version
(mean rank = 92.15), further improvement in individualizing a news­
letter (mean rank = 186.42) led to only a small increase in SEU. This
Table 6
result is described by the comparison of the mean ranks according to the
Comparison of mean ranks according to Kruskal–Wallis.
Kruskal-Wallis test in Table 6.
Level of personalization n Mean rank
The null hypothesis, H0, assumed that there is no difference between
the mean ranks of groups. We used asymptotic significance testing SEU Total Standardized 99 92.15
because each sample had more than 30 respondents (Malhotra, 2007). Personalized 100 170.86
Individualized 100 186.42
As the value of asymptotic significance was 0.00, and thus below the N = 299
threshold of 0.05, we rejected H0 and assumed significant differences

Table 5
Results of group comparison of SEU.
Group n Minimum Maximum Median M SD

SEU Total 1 (standardized, low) 51 0.00 0.34 0.045 0.087 0.093

2 (standardized, high) 48 0.00 0.41 0.010 0.048 0.087
3 (personalized, low) 50 0.00 0.90 0.496 0.486 0.282
4 (personalized, high) 50 0.00 0.53 0.078 0.103 0.104
5 (individualized, low) 50 0.00 0.97 0.606 0.554 0.270
6 (individualized, high) 50 0.00 0.84 0.094 0.142 0.167

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M.H.J. Gouthier et al.
carried out a Mann–Whitney U test, which is applicable for cases with
two independent samples (low and high). In addition to creating the
ranks, the respective rank sums are given in the first step, resulting from
the product of the number of observations and mean rank. The goal is
again to reject the null hypothesis, which assumes that there are no
significant differences between groups with low and high information
sensitivity in terms of their effects on the dependent variable SEU.
Table 7 depicts the results of the underlying Mann-Whitney U test.
Regarding SEU, a comparison of the two groups showed that those
with low information sensitivity had a higher rank sum than those with
high information sensitivity (rank sum = 28,703 vs. 16,147). The
Mann–Whitney U test also confirmed a significant difference between
the groups, allowing us to reject the null hypothesis. In addition, the
calculation of the effect size showed that the independent samples had a
moderately strong effect on the dependent variable SEU (r = 0.469).
Fig. 5 illustrates the difference in the evaluation of values by group by
showing the SEU for each group in connection with the respective in­
formation sensitivity.
The drawn line shows the SEU across the three levels of personali­
zation at low information sensitivity. Here, the increase in SEU from
standardized to personalized communication is the most pronounced,
with only a marginal increase in the next step of individualization. The
dashed line marks the progression at high information sensitivity, rising
more slowly and steadily with increased personalization than with low-
sensitivity information.
5. Discussion
Based on the above data analysis, several aspects must be discussed
in the context of situational privacy calculus.
5.1. Situational effects on SEU
Situational privacy calculus assumes that situational circumstances
in the decision-making process lead to a cost–benefit calculation in
which decision-makers weigh the anticipated risks and benefits of
disclosing personal information. SEU is then composed of perceived cost
and benefit elements weighted by the subjective probability of the
consequences of disclosure behavior. Following the assumption that the
data disclosure decision depends on the situation at hand, our study
manipulated two situational factors: the level of personalization as a
valuable benefit and degree of information sensitivity as perceivable
costs (Acquisti, Brandimarte, & Loewenstein, 2015).
H1 predicted a positive relationship between the level of personali­
zation and SEU, which is confirmed by the SEM results. This finding
verifies the assumption that the level of personalization is seen as a
primary benefit in the trade-off process as it increases the relevance of
the marketing content for the individual (Lee & Cranage, 2011; Morosan
& DeFranco, 2015; Sundar & Marathe, 2010). This expected value and
the motivation to process the respective information (Dijkstra, 2014) are
reflected in the corresponding SEU.
It is also valuable to discuss the additional results of the group
comparisons. We see that SEU increases substantially between stan­
dardized and personalized communication, but only slightly with the
step-up to individualized newsletters. This could be because the leap in
SEU from standardized to personalized was already so high that re­
spondents found the difference between a personalized or individualized
newsletter to be less valuable; the important thing was having some
Table 7
Results of Mann–Whitney U test.
Information sensitivity n Mean rank Rank sum
SEU Total Low 151 190.09 28,703
High 148 109.10 16,147
N = 299
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Journal of Business Research 148 (2022) 174–189
level of personal communication. Moreover, an extensive degree of
individualization could evoke negative feelings among customers; they
might suspect a loss of control over the disclosed data, which could be
accompanied by fears of espionage or a sense of paternalism (e.g.,
Gironda & Korgaonkar, 2018). Such risks influence the perception of
SEU and lead to a comparatively smaller increase in it.
A theory applicable here is the marginal utility theory, which can be
adapted from the classical theory of goods. It is assumed that as the
consumption of a good increases, its marginal utility decreases (Hor­
owitz, List, & McConnell, 2007). Following other studies (e.g., Greene &
Baron, 2001) to adapt this idea to our own context, marginal utility also
decreases as the level of personalization increases. This diminishing
marginal utility is then reflected in the evaluation of the expected
benefit, explaining the comparatively small difference in SEU from
personalization to individualization.
Within H2, the situational factor of information sensitivity is seen as
the negative counterpart to the benefit of personalization, and we hy­
pothesized a correspondingly negative effect on SEU. Our empirical
analysis supports this assumption, finding that the more sensitive the
information requested, the lower the associated SEU. This is in line with
other results showing that the level of sensitivity intensifies privacy
concerns and, therefore, risk perception (e.g., Bandara, Fernando, &
Akter, 2020; Malhotra et al., 2004; Sheehan & Hoy, 2000). In the case of
highly sensitive information, risk assumptions outweigh potential
benefit appraisals such that an increase in personalization leads to only
minor effects in SEU.
Thus, it can be indirectly deduced that the perception of a fair ex­
change can only arise if a company sufficiently justifies its collection of
sensitive data; receiving a standardized, personalized, or individualized
newsletter is on its own insufficient grounds. Essentially, it can be
confirmed that the type of information requested plays a major role in
SEU evaluation, and that companies can better justify the demand for
less sensitive data on lifestyle, shopping habits, and simple demographic
information than highly sensitive data, such as contact information,
financial figures, or family demographics. Further studies have
confirmed that justification is particularly useful when people initially
see little benefit from personalizing a service (e.g., Aiello et al., 2020;
White, Zahay, Thorbjørnsen, & Shavitt, 2008). Moreover, highly
personalized messages, which, in principle, require a tremendous
amount of personal information, can quickly lead to customer reactance
because of a feeling of intrusiveness (White et al., 2008). Therefore,
transparent and meaningful justification for collecting sensitive infor­
mation is crucial.
Aiello et al. (2020) also pointed out that a customer’s assessment of
data collection depends on the customer journey stage. As increased
data queries are considered even more critical at the beginning of a
customer journey, it is vital to request data at the appropriate time.
5.2. IUIPC as a disposition affecting SEU
In addition to situational factors and based on the neobehavioristic
approach, we also theoretically described context-specific dispositions
from past experiences (Campbell, 1997; Caudill & Murphy, 2000; Mal­
hotra et al., 2004). H3 proposed a negative influence of IUIPC on SEU
and showed a comparatively significant low effect size based on the
SEM, which nevertheless allows for its acceptance. This result empha­
sizes that part of the evaluation of utility in a decision-making situation
depends on past processing and learning processes from similar situa­
tions (Campbell, 1997). It was noted that only a fraction of the total
variance of the SEU could be explained by the independent latent var­
iables included. It can be stated that IUIPC contributes to the evaluation
of SEU but does not seem to be the decisive factor, and past experiences
are only one of several aspects that explain the trade-off between ben­
efits and costs. Here, it might be more critical for the individual to assess
the situation at hand rather than rely on past experiences.
M.H.J. Gouthier et al.
Fig. 5. Graphical summary of group differences on SEU.
5.3. SEU as a central predictor of information disclosure
Finally, SEU represents the central assumption of situational privacy
calculus that results in customer (non)disclosure behavior. Unlike
context-specific dispositions, future positive and negative consequences
are weighed and form the basis for the net value presented by the SEU.
H4 assumed a positive impact of SEU on respondents’ WTD, which was
supported by the data analysis. For customers, anticipated utility can be
compared with a subjective expected value, which allows for statements
about whether they position themselves positively or negatively toward
a decision (Adjerid, Peer, & Acquisti, 2018). This considers the pro­
portional (un)certainty in decisions regarding information disclosure.
Confirmation of the hypothesis by the described path coefficient in­
dicates that situational privacy calculus is expressed in the SEU, which
appears to be a reliable predictor of willingness to disclose. The strong
influence of SEU is also reflected in the explained variance. Therefore,
this substantiates the results of previous studies that focused on the
positive relationship between expected value and willingness to share
information, based on the personalization privacy calculus approach (e.
g., Kim, Park, Park, & Ahn, 2019; Xu et al., 2011).
In summary, we can confirm the results of previous studies that have
operationalized privacy calculus as a meaningful explanatory approach
to better explain online privacy behavior (e.g., Dinev & Hart, 2006;
Hallam & Zanella, 2017; Kehr, Kowatsch, Wentzel, & Fleisch, 2015a; Li
et al., 2010; Wilson & Valacich, 2012) but leave space for the integration
of additional factors that were not included in this investigation.
6. Implications and limitations
6.1. Practical implications
Owing to the nature of this study, the results provide e-commerce
companies with information on the prerequisites that should be met for
fair data exchange processes to ensure a mutually profitable relationship
with customers. In general, the service and support of all relevant
customer touchpoints in the pre-sales, sales, and after-sales phases have
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Journal of Business Research 148 (2022) 174–189
become increasingly relevant. According to Hudák et al. (2017), news­
letter marketing must actively support this. This highlights the impor­
tance of selecting appropriate communication measures and designing
suitable exchange processes to provide customers with the best indi­
vidual solutions. To be willing to disclose personal information, a
customer must perceive a subjective benefit. Our results emphasize that
perceived incentives can help provide such benefits and justify the
collection of personal data. However, companies should exercise caution
when requesting more sensitive information, as incentives such as
personalization are not necessarily sufficient to justify substantial data-
collection efforts. Based on the confirmation of situational privacy cal­
culus, companies should seek benefits or incentives of comparable value
that can be offered in return for data disclosure and the customer per­
ceives as fair.
Research has confirmed that situational influences tend to overwrite
existing dispositions such as general privacy concerns (Kehr, Kowatsch,
Wentzel, & Fleisch, 2015b; Wilson & Valacich, 2012). This intensifies
the need to create a fair and transparent exchange in which customers
show a certain degree of appreciation for incentives, such as personal­
ization. To ensure a profitable and longer-lasting relationship, it would
be interesting to examine medium- to long-term changes in personal
dispositions and their impact on customers’ perceptions of utility. As
reduced utility can be caused by attitudes that have already been
established, incentives must also be followed by correct executions to
avoid negative user experiences that harm the customer’s positioning in
the future. It has already been shown that the presence of increased data
protection concerns about informational privacy can be traced back in
part to the three dimensions of collection, control, and awareness
(Malhotra et al., 2004). To improve the public image of data privacy
practices, the European Union has recently adopted several data pro­
tection measures that are increasingly enforced by fines in the case of
noncompliance. As small- and medium-sized companies are responsible
for their own data privacy–compliant implementation, they face sig­
nificant hurdles in conforming to regulations. Therefore, legislators and
prominent companies should cooperate to support them in their en­
deavors. This would help close the gap between ideas regarding data
M.H.J. Gouthier et al.
privacy compliance and concrete security implementation. In addition,
it can generate further confidence-building measures concerning the
security and reliability of the use of personal data in e-commerce. An
existing example of this can be found in so-called “permission market­
ing,” whereby recipients are informed about collecting and using their
data and authorizing the company to contact them (based on Culnan &
Armstrong, 1999). Ultimately, a shift from mass marketing to one-to-one
marketing can only take place with the support of customers, as they are
the ones who will appreciate being contacted by individualized and
need-based communication on the one hand and being treated lawfully
in their privacy on the other hand (Gironda & Korgaonkar, 2018).
6.2. Theoretical implications
On a theoretical level, the results of this study contribute to the
elucidation of situational privacy calculus literature. From a neo­
behavioristic perspective, Belk (1975) stimulus–organism–response
model can be assumed to be a reasonable conceptual basis for explaining
the digital privacy behavior of individuals. Owing to the influence of
situational stimuli, individuals undertake an unobservable intra­
psychological evaluation process, which can be made measurable by
indicators under certain conditions; this process can be found in the
situational privacy calculus as a weighing of the benefits and risks.
Whereas benefits embody the evaluation of current information pro­
cessing, attitude constructs are the result of past processing and learning
processes that can be retrieved in the decision process. This study
demonstrated that the resulting SEU can serve as a reliable indicator of
behavioral intention. While past research has neglected any meaningful
distinction according to the degree of sensitivity to personal data, we can
confirm that the perception of utility and willingness to disclose also
depends on the type of personal information requested and the extent to
which this request is justified by the company’s improved offer or
communication.
The present work refers to digital marketing, which should serve as a
concrete example of direct communication and service provision in e-
commerce, depending on experiences that have already been made in
similar contexts. Although practitioners and researchers should not
neglect individual dispositions such as IUIPC when considering data
protection behavior, the assumption that situational factors can almost
completely override general or categorical attitudes cannot be refuted
(Barth & de Jong, 2017; Wilson & Valacich, 2012). Emphasizing the
importance of subjective and situation-specific decision-making, the
SEU theory is considered a good complement to the operationalization
of privacy calculus. Although it is based on rational or utility-
maximizing assumptions, the consideration of subjective uncertainty
allows room for irrational customer behavior. Thus, it can be assumed
that situational privacy calculus is also subject to mental reduction
techniques such as heuristics, which can undoubtedly simplify the
weighing process based on existing information.
Finally, linking our underlying research approach to Kahneman and
Tversky (1979) prospect theory may also be helpful. This theory is not
explicitly addressed in our study. While weighing decisions under the
occurrence of risk is considered, we assume no general risk aversion
with SEU, as required in prospect theory. Overall, prospect theory is
seen as an extension of the SEU approach. It divides the decision-making
process into two phases and guides the evaluation of alternatives
accordingly. This theory was developed to explain violations of the
principles of rational decision-making based on a value function.
Accordingly, the outcomes are defined as negative or positive deviations
from a neutral baseline. Losses are weighted more heavily than gains,
and it turns out that aversion to losses is generally much greater than the
desire for gains (Kahneman & Tversky, 1979). There is a further possi­
bility of investigating situational privacy calculus with this assumption.
This was not part of the underlying research questions by calculating the
general trade-off between the benefits and costs of a decision alternative
with equal weight. Thus, the present research design measures absolute
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Journal of Business Research 148 (2022) 174–189
utility. Simultaneously, prospect theory provides another research
perspective with the establishment of a central reference point for
further theoretical and empirical investigations.
6.3. Limitations and avenues for future research
In addition to our study’s practical and theoretical implications, it is
important to note its certain limitations. First, one may criticize the use
of two different empirical approaches to test our hypotheses. However,
group comparisons are crucial for evaluating the different effects of
situational factors. The lack of a normal distribution of variables made
the corresponding analysis more difficult; the ANOVA had to be
replaced, although it would have been helpful to investigate the
respective interaction effects of the variables. Second, because the study
was based on an exploratory design using a scenario technique, we could
only evaluate anticipated behavior and not actual behavior, an aspect
that also finds criticism in Norberg et al. (2007). Nevertheless, this
problem is generally countered by formulating scenarios as realistically
as possible.
Experimental research approaches would be particularly suitable for
further investigations in which the purpose of data collection is
explained transparently to customers to analyze the respective group
effects with further influential factors. Third, in terms of further influ­
ential factors, our study is limited to a specific geographical setting with
associated data privacy regulations, namely in the context of European
regulations. This makes the findings less generalizable. There are also
areas with more lenient regulations worldwide, and customers in those
countries might have other expectations when thinking about informa­
tion disclosure. This limitation highlights an avenue for further research
to include different privacy regulations or cross-cultural effects as a
means to analyze potential differences in perceptions of situational
privacy calculus (e.g., Robinson, 2017; Trepte et al., 2017), even though
the basic mechanism of the approach remains unaffected. Another
limitation in terms of the generalizability of the results is the study
context of a newsletter subscription. Researchers in this area could
consider testing our findings in other contexts. Finally, it might be
helpful for future research to consider situational privacy calculus with
more than two action alternatives. Because of the application fields of
newsletters, the choices were deliberately limited here to “disclosure”
and “nondisclosure.” Nevertheless, integrating a possible third alterna­
tive (e.g., with an adaptation of preference settings) is valuable because
it provides potential insights into a more differentiated evaluation pro­
cess related to the SEU.
7. Conclusion
The overall aim of this study was to explain situational privacy cal­
culus in e-commerce. To this end, we identified personalization and
information sensitivity as two essential situation-specific factors to
manipulate a customer’s cost–benefit evaluation.
Referring to the SEU theory, personalization has a positive influence
on SEU, although there is only a slight difference between the perception
of personalized and individualized incentives. Specifically, the shift
from standardized to personalized communication has a strong positive
effect on SEU. By contrast, a further increase in personalization can be
seen as too intrusive, ultimately leading to the potential costs of
disclosure nearly outweighing the expected additional benefits.
In terms of information sensitivity, we confirmed that a request for
highly sensitive information negatively impacts SEU and that a corre­
sponding justification for collecting personal data becomes increasingly
relevant with greater information sensitivity. Because we could only
prove a weak effect of IUIPC on SEU, general privacy concerns cannot be
acknowledged as a central predictor. Future research should investigate
additional factors that might influence SEU. Nevertheless, the positive
effect of SEU on customers’ WTD is indicated by our data analysis, thus
supporting situational privacy calculus.
M.H.J. Gouthier et al.
In summary, this study contributes to a better understanding of
customer behavior regarding privacy decisions. Situational privacy
calculus represents a promising solution to the privacy paradox. Com­
panies should actively promote fair data-exchange processes instead of
relying on customers’ free disclosure of their personal data in e-com­
merce. To close the gap between theory and practice, there is a need for
further research in this area as the technological tools for creating
information-rich customer profiles, and visions for one-to-one commu­
nication continue to grow. Companies need to be aware that the more
information customers share, the more likely companies are to be
required to improve their products and services (Hritzuk, 2018).
Moreover, their collection of personal data must be justified by in­
centives to win customers as supporters of a one-to-one marketing
approach (Peppers & Rogers, 2000). To enable transparent and fair
exchange, it is important to better understand customer behavior in
digital environments and the technologies used to collect and process
data in e-commerce, such as machine learning and AI. Therefore, com­
panies and legislators urgently need to agree on meaningful and uni­
formly applicable legislation and implementation so that customers’
informational privacy is protected without putting small- and medium-
sized enterprises at a disadvantage.
CRediT authorship contribution statement
Matthias H.J. Gouthier: Writing – review & editing, Writing –
original draft, Methodology, Supervision, Conceptualization. Carina
Nennstiel: Writing – review & editing, Writing – original draft, Formal
analysis, Validation. Nora Kern: Conceptualization, Methodology,
Writing – original draft, Writing – review & editing. Lars Wendel:
Methodology, Investigation.
Declaration of Competing Interest
The authors declare that they have no known competing financial
interests or personal relationships that could have appeared to influence
the work reported in this paper.
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Matthias H. J. Gouthier is a professor of marketing and digital services and director of the
Center for Service Excellence at the University of Koblenz-Landau, Germany. His research
focuses on digital services, service excellence, customer delight, service-oriented human
resource management, and customer experience management. He has published articles in
International Business Review, International Journal of Services and Operations Man­
agement, Journal of Marketing Theory and Practice, Journal of Service Management,
Journal of Service Research, Journal of Service Theory and Practice (formerly: Managing
Service Quality), Journal of the Academy of Marketing Science, Marketing Theory, Total
Quality Management & Business Excellence, and others.
Carina Nennstiel is a research associate at the Chair of Marketing and Digital Services at
the University of Koblenz-Landau, Germany. Her research interests include customer
inspiration in marketing, customer experience management, digitalization of services as
well as service excellence.
Nora Kern is a research associate at the Chair of Marketing and Digital Services at the
University of Koblenz-Landau, Germany. Her research interests are personalization stra­
tegies in marketing, hyper-personalization, customer experience management, and service
excellence.
M.H.J. Gouthier et al. Journal of Business Research 148 (2022) 174–189

Lars Wendel is a graduate of the master’s program in Information Management at the

University of Koblenz-Landau, Germany. Now he is working as a Junior SAP consultant at
the IT company “Bechtle” in Bonn, Germany.

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