U-Commerce Product Adoption: An Economic Model for Personalization and Privacy Concerns

U-commerce is considered as the ultimate form of commerce. Highly advanced in technologies, u-commerce can provide various unique personalized products and services based on customers´ identities and preferences. However, customers have to give up part of their personal information in order to get the personalization benefits. Therefore, privacy concerns have become a major obstacle to the adoption of u-commerce products. This study uses a simple economic model to explore how the value of personalization, privacy concerns, cost of information collection and additional value of information can impact the adoption of u-commerce products and services. The results show that the value of personalization to consumer and the additional value of personal information to firm have positive correlation to personalized product adoption, and consumer´s privacy concerns, price and cost of information collection negatively affected the adoption of personalized products.