Concern about the lack of data protection is generally very high. Only three percent of German Internet users do not care what happens to their data on the Internet. However, many Internet users readily disclose their personal data. 87 percent of the Internet users in Germany use online services that collect their personal data, even though they do not have full confidence in the data protection provided by these services. This constitutes the so-called privacy paradox. A systematic review of the literature on this phenomenon is provided by Barth and de Jong (2017).

Engels and Grunewald (2017), Taddicken (2013), Keith et al. (2013), Sutanto et al. (2013), Acquisti and Gross (2006) and Hann et al. (2002) also deal with the privacy paradox. There are various explanations for the fact that although privacy is considered important, this is not necessarily reflected in the behavior of users. Among other things, a lack of rationality, ignorance, context dependency and the formability of preferences play a role: Acquisti et al. (2016) find that stated preferences generally differ from observed behavior and that people's attitudes to data protection are subjective, context-dependent and dynamic, i.e. time-dependent. For example, because of a high level of present preference, Internet users perceive immediate rewards from online services and data sharing as more important than discounted future consequences. The benefits are more immediate than the costs that are often only noticed ex post. A lack of knowledge about the extent to which data is stored and used, and how to protect this data, also leads to inconsistent online behavior. Two thirds of German Internet users state that they lack information about what they themselves could do to protect their data on the Internet.

Distorted perceptions influence how much value users place on data protection. The perception of a violation of privacy depends strongly on the context. Acquisti et al (2015) show that people are more likely to disclose information if they observe that their environment does the same. This can explain the high willingness to disclose personal data such as photos and other postings in social networks.

Many Internet users follow a simple cost-benefit calculation when it comes to privacy, where the perception of costs and benefits is often distorted. They may be willing to pay for a more privacy-friendly service if it offers significant added value and there is confidence in the service. The advantages of data disclosure are weighted higher in the privacy paradox than the threat to privacy. The assessment of the importance of data protection is therefore not absolute but can be controlled by economic incentives. The willingness to pay for data protection and data protection criticism or data protection preferences are often not consistent with each other.

Against this background, this study examines the preferences of digital natives for privacy. It is believed that through early and continuous contact with online services, young people are more likely to be able to assess privacy preferences and choose respective settings in online services. 89 percent of the 12 to 19-year-olds in Germany are online every day, regardless of gender, age or education. They grow up with digitalization and the Internet. They meet and connect in social networks and communicate via digital services. They leave digital traces through their online behavior, which build up over the years to large data sets and are hardly erasable.

Based on a survey of 3,000 students aged between 14 and 21 in 2017 in Germany, digital natives’ use of social media and networks, referred to as social online services, and their privacy preferences for these online services are analyzed. In addition, the willingness to pay for privacy-friendly online services is determined. The contribution of this paper is hence a close analysis of the Internet privacy preferences of a part of society that should be very familiar with the Internet. It is the first empirical evidence of the existence of the so-called privacy paradox among digital natives in Germany.