Which attributes should be considered in regulating the Internet of Things? Evidence from conjoint analysis

Abstract

With rapid development in the Internet infrastructure, new and innovative services using the Internet of Things (IoT) have emerged. Despite the wide range of topics regarding IoT services that have been discussed, regulatory concerns solely concentrate on personal information and privacy protection in academic research and legislation. In other words, a comprehensive regulatory framework for IoT services should be developed with potential consumers in mind; however, relevant studies are lacking. To bridge this research gap, this study estimates consumer preferences to build an appropriate regulation for IoT service deployment. The study uses conjoint analysis and a layered model to investigate the importance of attributes for IoT services as part of the consideration supporting IoT regulations. Based on the estimation results, all attributes of the IoT services are relevant to potential consumers, and as an example of IoT applications, the Big Data analysis application is more critical to consumers in terms of marginal willingness-to-pay and relative importance. Furthermore, a new type of vertical integration is appealing to potential customers. Policymakers can benefit from the development of various IoT policies, simultaneous pursuits of IoT application innovation and privacy concerns, and nondiscriminatory regulation principles.