Compensation paradox: the influence of monetary rewards on user behaviour

Abstract

Many e-commerce companies collect users' personal data for marketing purposes despite privacy concerns. Information-collecting companies often offer a monetary reward to users to alleviate privacy concerns and ease the collection of personal information. This study focused on the negative effects of monetary rewards on both information privacy concerns (IPC) and information disclosure. A survey approach was used to collect data and 370 final responses were analysed using a two-way analysis of variance and a binomial logistic regression model. The results show that monetary rewards increase IPC when an information-collecting company requires sensitive information. Additional results indicate that building trust is a more effective way of collecting personal data. This study identifies how organisations can best execute information-collection activities and contributes additional insights for academia and practitioners.