Why we give up our privacy so easily

The Twitter Web site displayed on a laptop computer.

TEXT OF STORY

Tess Vigeland: Used to be most coupons came in the mail or in the Sunday paper. But now it is far more common that they come with a click. Online marketers are practically throwing discounts at potential customers. But there is a price. In return, they expect you to hand over all kinds of personal information and you do. Which prompts us to ask:

Jay Leno: Let me start with question number one: What the hell were you thinking?

So how much privacy would you give up for 25 percent off a great new pair of shoes or maybe a free magazine subscription?

Reporter Sally Herships looks at the trade-offs.


Sally Herships: Shea Sylvia is 29. She works in online marketing in Kansas City. She's a blogger and a Foursquare user. In case you're not familiar with it, Foursquare is a mobile app that lets you track your location. You "check in" and your friends know where you are. Some businesses offer coupons if you "check in" at their venue.

A couple of months ago, Sylvia was meeting some friends she'd met through her blog at a restaurant. When she arrived, she checked in on Foursquare. She also posted her location on Twitter.

Shea Sylvia: A few minutes later, the hostess came over to my table and asked if anybody there was named Shea Sylvia.

There was a phone call for her, which Sylvia says she thought was odd. Because after all, she has a cell phone. The guy on the phone said his name was Brian.

Sylvia: And I don't know anybody named Brian. So I kept saying "Who, who?" And he said, "I understand you're meeting people from the Internet, well, maybe you and I can hang out sometime. Maybe we could even go for a bike ride." And then he said, "Is this getting a little creepy?" And it was, so I said yes. And he said, "Maybe you shouldn't check in on Foursquare, then should you, Shea?"

Sylvia asked the hostess how she knew to pick her out of the crowd. Turns out "Brian" had described her. Short hair, glasses, just like what Sylvia's avatars on Foursquare and Twitter look like. I asked her: Why make her location public?

Sylvia: Yeah, what was I thinking?

Sylvia said she felt safe. She was in public, sharing information with friends. She didn't think about the strangers on Twitter and Foursquare who could also see her posts.

There are millions of Sylvias out there, giving away their private information for social reasons. More and more, they're also trading it in for financial benefits, like coupons and discounts. Social shopping websites like Blippy and Swipely let shoppers post about what they buy. But first they turn over the logins to their e-mail accounts or their credit card numbers, so their purchases can be tracked online.

Ryan Calo: And they think to themselves, "Oh gosh, this company has a policy of privacy, I don't need to worry."

That's Ryan Calo. He runs the Consumer Privacy Project at Stanford. Calo says people are easily lulled into a false sense of security the minute that privacy policy pops up on the website. But, Calo says, a privacy policy doesn't necessarily protect your privacy. It can say anything. Some consumers know that. They actually read privacy policies, and then they give up their information anyway.

Rachel Lawes is an British expert on consumer behavior.

Rachel Lawes: Firstly, I think there is simple ego gratification. It is a very satisfying thing to broadcast information about yourself.

Lawes says the ability to reach millions of people so easily with the Internet is relatively new. It makes people feel good.

Lawes: Now everybody's important, everybody's special.

Alessandro Acquisti researches the economics of privacy at Carnegie Mellon, and he says the value we put on privacy can easily shift. In other words, if giving away your credit card information or even your location in return for a discount or a deal seems normal, it must be OK.

Alessandro Acquisti: Five years ago, if someone told you that there'd be lots of people going online to show, to share with strangers their credit card purchases, you probably would have been surprised, you probably would thought, "No, I can't believe this. I wouldn't have believed this."

But Acquisti says, when new technologies are presented as the norm, people accept them that way. Like social shopping websites.

Herships: So the more we use sites like Blippy, the more we'll use sites like Blippy?

Acquisti: Or Blippy 2.0.

Which Acquisti says will probably be even more invasive, because as time passes, we're going to care less and less about privacy.

Back in Kansas City Shea Sylvia is feeling both better and worse. She thinks the phone call she got that night at the restaurant was probably a prank. But it was a wake up call.

Sylvia: I understand the consequences very clearly now. And I'm very particular about how I behave using that tool. But there are a lot of people who aren't that careful.

Shea Sylvia is careful. She quit Foursquare. But a couple of weeks later, she came back with a new profile -- one that's as private as possible.

I'm Sally Herships for Marketplace Money.

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