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How data exchange in company networks influences users’ decisions concerning disclosure

On the Internet, clients’ data is increasingly exchanged between companies. How does this impact users’ decisions to disclose data? This question is investigated by information systems and marketing business researchers at the University of Passau in a project funded by the DFG.

As soon as internet users make any movement, they deposit data. At first glance, a customer’s individual dataset is of low value – but accumulated, it becomes a valuable resource. Companies exchange this data between themselves for advertising purposes, and are also able to develop new products and services based on these data. Furthermore, many companies have discovered the value of customer data as an additional and lucrative source of profit, and have traded on that data. Given the existence of this trading, it is difficult for an individual customer to gain any overview as to where his/her data will end up.

Customer data exchange between companies

“We refer to such practices as ‘Business Network Data Exchange’, abbreviated to BNDE”, stated Professor Jan Schumann, chairholder for marketing and innovation, at the University of Passau. Professor Thomas Widjaja, chairholder for business information systems, added: “This exchange of data is also taking place, increasingly, between companies from traditional fields such as the retail.”

Passau researchers, working on the DFG project “BNDE – Beyond the dyad: how the privacy calculus is impacted by the effects of data exchange in company networks”, are investigating how these new practices influence the disclosure of customers’ data: “We are interested in the precise moment at which the user makes the corresponding decision”, comments Professor Widjaja. This is an area where established privacy calculus theory is reaching its boundaries. The privacy calculus theory often implicitly assumes that a consumer is confronted with an individual company’s enquiry about disclosing data, in other words in a customer/provider dyad. Perhaps it would be wise to further investigate the risks and benefits, in such a situation. However, if personal data is exchanged and traded on a network of companies, it is difficult for the consumer to assess the consequences and to make a fully rational decision. 

High level of uncertainty in decision-making

In the case of the “Business Network Data Exchange” (BNDE), customers do indeed disclose the data not only of one company, but of an entire network of companies which are, to some extent, unknown – and consequently they are confronted with a high level of uncertainty. “Spontaneous affective responses to such business models or – to put it simply – one’s gut feeling, could consequently have a significant part to play in making such a decision,” commented Professor Schumann. “In our research, we intend to gain an improved understanding as to precisely how the decision-making process operates, what it is that drives that decision and how such business models need to be configured and communicated in order to enable consumers to make better decisions and also to help companies to configure their BNDE networks such as to meet with customer acceptance”, Thomas Widjaja adds.

This project, which is conducted by marketing expert Professor Schumann and Information Systems specialist Professor Widjaja, is integrated -- at the University of Passau -- into a major area of research into data trading: scientists from all faculties are investigating this issue from various perspectives. They range from the smart regulation of the digital platform economy through psychological hindrances to using the right to data portability and legal questions of the digitalization processes.

The German research association (Deutsche Forschungsgemeinschaft, DFG) is funding this project for a period of three years.

Principal Investigator(s) at the University	Prof. Dr. Jan Hendrik Schumann (Lehrstuhl für Betriebswirtschaftslehre mit Schwerpunkt Marketing und Innovation) Prof. Dr. Thomas Widjaja (Lehrstuhl für Wirtschaftsinformatik mit Schwerpunkt Betriebliche Informationssysteme)
Project period	01.11.2020 - 31.10.2023
Source of funding	DFG - Deutsche Forschungsgemeinschaft > DFG - Sachbeihilfe
Projektnummer	SCHU 2513/4-1, AOBJ 668709
Themenfelder	Betriebswirtschaftslehre, Betriebswirtschaftslehre