Behavioral advertising and consumer welfare: An empirical investigation (joint with Eduardo Mustri and Idris Adjerid)

Date: Dec 2, 2021
Time: 04:00 PM (Local Time Germany)
Speaker: Alessandro Acquisti, Carnegie Mellon University
Alessandro Acquisti is a Professor of Information Technology and Public Policy at the Heinz College, Carnegie Mellon University. He is the director of the Privacy Economics Experiments (PeeX) Lab and the co-director of the Centre for Behavioural and Decision Research (CBDR) at CMU. His research combines economics, decision research, and data mining to investigate the role of privacy in a digital society. His studies have spearheaded the economic analysis of privacy, the application of behavioral economics to the understanding of consumer privacy valuations and decision-making, and the investigation of privacy and personal disclosures in online social networks. Alessandro has been the recipient of the PET Award for Outstanding Research in Privacy Enhancing Technologies, the IBM Best Academic Privacy Faculty Award, and numerous Best Paper awards. His studies have been published in journals across multiple disciplines, including Science, Proceedings of the National Academy of Science, Journal of Economic Literature, Management Science, Marketing Science, Journal of Consumer Research, and Journal of Experimental Psychology. His research has been featured in media outlets around the world, including The Economist, The New Yorker, The New York Times and New York Times Magazine, The Wall Street Journal, The Washington Post, Wired, and 60 Minutes. His TED talks on privacy and human behaviour have been viewed over a million times. He has received a PhD from UC Berkeley and Master degrees from UC Berkeley, the London School of Economics, and Trinity College Dublin. He has held visiting positions at the Universities of Rome, Paris, and Freiburg (visiting professor); Harvard University (visiting scholar); University of Chicago (visiting fellow); Microsoft Research (visiting researcher); and Google (visiting scientist).
Location: Zoom meeting
Host: MPI Collective Goods & MPI for Cybersecurity and Privacy

We investigate the impact of behavioral advertising on consumer welfare in a within-subjects online experiment. While the vast majority of empirical work on the impact of online advertising focuses on click and conversion rates of behaviorally targeted ads, we propose a counterfactual approach, in which online consumers are presented with alternative offers: products associated with targeted ads they were served online, competing products, and random products. Participants are asked to compare these alternatives along a variety of metrics. Thus, we assess consumer welfare implications of behavioral advertising comparatively, in an ongoing online experiment that captures differences in participants’ purchase intentions and other product characteristics which can affect consumer utility.