skip to main content
US FlagAn official website of the United States government
dot gov icon
Official websites use .gov
A .gov website belongs to an official government organization in the United States.
https lock icon
Secure .gov websites use HTTPS
A lock ( lock ) or https:// means you've safely connected to the .gov website. Share sensitive information only on official, secure websites.

Explore Research Products in the PAR
It may take a few hours for recently added research products to appear in PAR search results.


Title: Privacy and the Value of Data
How does protecting consumers' privacy affect the value of their personal data? We model an intermediary that uses consumers' data to influence prices set by a seller. When privacy is protected, consumers choose whether to disclose their data to the intermediary. When privacy is not protected, the intermediary can access consumers' data without their consent. We illustrate that protecting privacy has complex effects. It can increase the value of some consumers' data while decreasing that of others. It can have redistributive effects, by benefiting some consumers at the expense of others. Finally, it can increase average prices and reduce trade.  more » « less
Award ID(s):
2149315
PAR ID:
10510222
Author(s) / Creator(s):
;
Publisher / Repository:
AEA
Date Published:
Journal Name:
AEA Papers and Proceedings
Volume:
113
ISSN:
2574-0768
Page Range / eLocation ID:
197 to 203
Format(s):
Medium: X
Sponsoring Org:
National Science Foundation
More Like this
  1. ; ; ; ; ; (, Conservation Biology)
    Abstract Choices conservation organizations make when designing and implementing protected area strategies affect the timing of land protection. Well‐timed habitat protection will have a greater impact on biodiversity outcomes; yet, decisions affecting the timing of protection have received much less attention than other aspects of protected area design. We reviewed evidence on the timing of protected area establishment and on temporal variation in factors influencing the ecological effectiveness and cost‐effectiveness of establishing protected areas. Protected area coverage often increases in episodic bursts rather than at some uniform rate. Moreover, temporal variation in biodiversity indicators, habitat conversion threats, and the cost of protecting land suggests that the conservation benefit of protecting land at some times will be greater than that at others. Conservation organizations increase their flexibility to choose when they protect land by using flexibility‐creating mechanisms, such as loans, multiyear budgeting, and endowment management. Models and theory suggest how this can be done to have the largest positive impact for conservation by exploiting long‐ and short‐term variation in factors that affect the rate of biodiversity return on protected area investments. 
    more » « less
  2. ; (, American Economic Review)
    A monopolist platform uses data to match heterogeneous consumers with multiproduct sellers. The consumers can purchase the products on the platform or search off the platform. The platform sells targeted ads to sellers that recommend their products to consumers and reveals information to consumers about their match values. The revenue-optimal mechanism is a managed advertising campaign that matches products and preferences efficiently. In equilibrium, sellers offer higher qualities at lower unit prices on than off platform. The platform exploits its information advantage to increase its bargaining power vis-à-vis the sellers. Finally, privacy-respecting data-governance rules can lead to welfare gains for consumers. (JEL D11, D42, D44, D82, D83, M37) 
    more » « less
  3. ; ; ; (, 2021 IEEE Symposium on Security and Privacy (SP))
    In prior work, researchers proposed an Internet of Things (IoT) security and privacy label akin to a food nutrition label, based on input from experts. We conducted a survey with 1,371 Mechanical Turk (MTurk) participants to test the effectiveness of each of the privacy and security attribute-value pairs proposed in that prior work along two key dimensions: ability to convey risk to consumers and impact on their willingness to purchase an IoT device. We found that the values intended to communicate increased risk were generally perceived that way by participants. For example, we found that consumers perceived more risk when a label conveyed that data would be sold to third parties than when it would not be sold at all, and that consumers were more willing to purchase devices when they knew that their data would not be retained or shared with others. However, participants’ risk perception did not always align with their willingness to purchase, sometimes due to usability concerns. Based on our findings, we propose actionable recommendations on how to more effectively present privacy and security attributes on an IoT label to better communicate risk to consumers 
    more » « less
  4. ; (, The Review of Economic Studies)
    Abstract We study list price competition when firms can individually target consumer discounts (at a cost) afterwards, and we address recent privacy regulation (like the GDPR) allowing consumers to choose whether to opt-in to targeting. Targeted consumers receive poaching and retention discount offers. Equilibrium discount offers are in mixed strategies, but only two firms vie for each contested consumer and final profits on them are Bertrand-like. When targeting is unrestricted, firm list pricing resembles monopoly. For plausible demand conditions and if targeting costs are not too low, firms and consumers are worse off with unrestricted targeting than banning it. However, targeting induces higher (lower) list prices if demand is convex (concave), and either side of the market can benefit if list prices shift enough in its favour. Given the choice, consumers opt in only when expected discounts exceed privacy costs. Under empirically plausible conditions, opt-in choice makes all consumers better off. 
    more » « less
  5. ; ; (, Review of Economic Studies)
    Abstract We present a model of digital advertising with three key features: (1) advertisers can reach consumers on and off a platform, (2) additional data enhances the value of advertiser–consumer matches, and (3) the allocation of advertisements follows an auction-like mechanism. We contrast data-augmented auctions, which leverage the platform’s data advantage to improve match quality, with managed-campaign mechanisms that automate match formation and price-setting. The platform-optimal mechanism is a managed campaign that conditions the on-platform prices for sponsored products on the off-platform prices set by all advertisers. This mechanism yields the efficient on-platform allocation but inefficiently high off-platform product prices. It attains the vertical integration profit for the platform and the advertisers, and it increases off-platform product prices while decreasing consumer surplus, relative to data-augmented auctions. 
    more » « less
  • Citation Formats
  • MLA
  • APA
  • Chicago
  • BibTeX
  • Save / Share this Record
  • Send to Email