The Price Of Privacy: An Examination of the Economic Costs of Abstention from Social Networks

Currently the common school of thought is that individuals either choose to participate in social networks, at the expense of their privacy, or choose to abstain from said social networking sites (SNSs.) We illustrate in this paper that there are very real costs and risks to not participating in social networks. The analysis we provide here illustrates that not participating in social networks is likely to have a significant career cost, and thus that expecting privacy sensitive users to abstain from social networking may not be reasonable. If users face harm whether or not they use SNSs, the rational choice is to join a SNS and gain the utility of SNS membership. Specifically, we delve into the risks associated with abstaining from social networks, enumerate the risks encountered when participating in SNSs. We conclude that a rational actor would elect to participate in social networking; and that this choice cannot be accurately described without assessment of the considerable negative externalities.