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Behavioral Nudges and the Privacy Paradox in Digital Consumer Ecosystems

Author(s):Ishaan Malhotra, Tanvi Kulkarni, Rohan Deshpande, Meera Vasisht

Affiliation: Department of Digital Business, S. P. Jain Institute of Management and Research (SPJIMR), Mumbai

Page No: 33-36

Volume issue & Publishing Year: Volume 3, Issue 2, Feb 2026

published on: 2026-02-25

Journal: International Journal of Advanced Multidisciplinary Application.(IJAMA)

ISSN NO: 3048-9350

DOI: https://doi.org/10.5281/zenodo.18779200

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Abstract:
As digital platforms become increasingly integrated into daily life, a significant "Privacy Paradox" has emerged: consumers express high levels of concern regarding data privacy but continue to share personal information for minor conveniences. This research utilizes the principles of Behavioral Economics to investigate the cognitive biases that drive this discrepancy. By conducting a controlled experiment with 2,500 digital consumers, the study evaluates how "Choice Architecture"—specifically default settings, framing effects, and hyperbolic discounting—influences data disclosure behavior. Our findings suggest that consumers are 40% more likely to share sensitive data when the benefits are immediate and the privacy risks are framed as distant or abstract. The paper identifies the role of "Dark Patterns" in manipulative interface design and proposes a framework for "Ethical Nudging." This research offers strategic insights for MBA practitioners and policymakers to design transparent digital ecosystems that balance corporate data needs with genuine consumer autonomy.

Keywords: Behavioral Economics, Privacy Paradox, Choice Architecture, Consumer Psychology, Digital Marketing, Ethical Nudging, Data Sovereignty, Dark Patterns.

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