What Hiding Reveals: Ironic Effects of Withholding Information

Imagine being asked about your recreational drug habits by your employer, and realizing that in order to be completely truthful you’ll have to admit that you have occasionally indulged. In four experiments, we show that people believe that the best way to deal with such situations is to opt out of answering at all – but that this strategy is costly, because observers often infer the very worst when consumers choose not to answer such questions: “If he refuses to even answer this question, he must have a serious drug problem.” The internet has created a fundamental shift toward openness, and with this shift, consumers are increasingly facing choices of whether to share or withhold information. Previous research shows that consumers tend to ‘infer the worst’ about products when marketers fail to provide information on the products’ key attributes (e.g., Kivetz & Simonsohn 2000; Huber & McCann, 1982; Simmons & Lynch 1991). In contrast however, we focus on consumers’ decisions of whether to share or withhold their personal data – and the wisdom or error of such decisions.