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Utility Maximization Theory

1655 Words7 Pages

To strengthen the theoretical basis of this area and throw light on further research, an integrated theoretical framework is proposed. This part outlines the relationships between privacy antecedents, privacy belief, privacy-driven behavioral intention and privacy behavior on marketing basis. Most of the relationships (either positive or negative) between concepts/constructs are clearly specified in the corresponding literature, although some concepts, such as personality traits, may have varied effects depending on the particular personalities studied.
To study the formation of online consumers' information privacy concern and its effect, scholars from different perspectives applied multiple theories in research. To date, there has yet to be a systematic review and integration of the theories in literature. The rise of social media application popularity is …show more content…

The theory suggests that a person's intention to disclose personal information is based on a calculus of behavior (i.e., privacy calculus) in which potentially competing factors are weighed in light of possible outcomes. Specifically, consumers perform the risk-benefit analysis in the privacy calculus and decide whether to disclose information based on the net outcomes (Bagozzi, 2000).
The utility maximization theory is the variation of economic exchange theories in the social exchange domain (Solis, 2010). The tenet of the theory is to maximize the total utility or satisfaction by a person. In terms of information privacy, it depicts the utility function of information disclosure as the difference between expected benefits (such as monetary incentive and personalized service) and expected costs (such as consumer privacy concerns and risks), and suggests an optimal or equilibrium point between the two, which determines the amount of information the person is willing to

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