Honors Theses and Capstones

Date of Award

Spring 2019

Project Type

Senior Honors Thesis

College or School

PAUL

Department

Decision Sciences

Program or Major

Business Administration

Degree Name

Bachelor of Science

First Advisor

Jeffrey Sohl

Abstract

In recent years, Internet of Things (IoT) devices have exploded on the consumer scene. These emerging products bring new technological capabilities into our everyday lives. IoT is projected to contribute anywhere from $4-11 trillion to the global economy and companies are investing billions of dollars into the technology. However, with the vast amount of data that IoT devices collect, consumers are burdening the risk of having their personal data breached or sold to third parties. This paper first identifies why consumers may be weary or willing towards providing their personal data and how unconscious biases in the purchasing process cause consumers to misperceive their level of risk. Then, the impact of potential regulations that may be enacted are analyzed. Finally, a study is conducted that tests consumers’ purchasing behavior around a smart speaker that is offered under a three-tier price model providing three different levels of data privacy. From this study, a two-tier price model is proposed as an effective measure towards ensuring greater equality in the personal data trade between consumers and sellers, and a proactive alternative to regulations that may create new challenges for both parties.

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