Recent work has constructed economic mechanisms that are both truthful and
differentially private. In these mechanisms, privacy is treated separately from
the truthfulness; it is not incorporated in players' utility functions (and
doing so has been shown to lead to non-truthfulness in some cases). In this
work, we propose a new, general way of modelling privacy in players' utility
functions. Specifically, we only assume that if an outcome o has the property
that any report of player i would have led to o with approximately the same
probability, then o has small privacy cost to player i. We give three
mechanisms that are truthful with respect to our modelling of privacy: for an
election between two candidates, for a discrete version of the facility
location problem, and for a general social choice problem with discrete
utilities (via a VCG-like mechanism). As the number n of players increases,
the social welfare achieved by our mechanisms approaches optimal (as a fraction
of n)