| Abstract: |
We examine the trade-off between functionality and data privacy inherent in
many AI products by conducting a randomized survey experiment with 1, 734
participants from the US and several European countries. Participants'
willingness to adopt a hypothetical, AI-enhanced app is measured under three
sets of treatments: (i) installation defaults (opt-in vs. opt-out), (ii)
salience of data privacy risks, and (iii) regulatory regimes with different
levels of data protection. In addition, we study how the willingness to adopt
depends on individual attitudes and preferences. We find no effect of defaults
or salience, while a regulatory regime with stricter privacy protection
increases the likelihood that the app is adopted. Finally, greater data
privacy concerns, greater risk aversion, lower levels of trust, and greater
skepticism toward AI are associated with a significantly lower willingness to
adopt the app. |