Price discrimination and product quality under opt-in privacy regulation

Chiara Conti () and Pierfrancesco Reverberi ()
Additional contact information
Chiara Conti: Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy
Pierfrancesco Reverberi: Department of Computer, Control and Management Engineering Antonio Ruberti (DIAG), University of Rome La Sapienza, Rome, Italy

No 2019-07, DIAG Technical Reports from Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza"

Abstract: We study how privacy regulation limiting the scope for price discrimination by a monopolist who sells online affects product quality and consumer surplus. We consider an opt-in regime where consumers may share personal data or not, in line with the recent EU GDPR. If consumers share data, they gain an additional benefit from buying related to the complementarity between information and quality, and they pay personalized prices instead of a uniform price. We find that, if the complementarity is strong enough, then product quality is higher with than without the opt-in regime. We also find that the opt-in regime has conflicting effects on consumers with different attitudes towards privacy, and that an increase in quality is a necessary condition for improving total consumer surplus. Overall, this study contributes to the debate on privacy protection by stressing the importance of analysing the relation between personal information and product quality.

Keywords: Privacy regulation; Opt-in regime; Price discrimination; Product quality (search for similar items in EconPapers)
Date: 2019
New Economics Papers: this item is included in nep-com
References: View references in EconPapers View complete reference list from CitEc
Citations:

Downloads: (external link)
http://users.diag.uniroma1.it/~biblioteca/sites/de ... ocuments/2019-07.pdf First version, 2019 (application/pdf)
Our link check indicates that this URL is bad, the error code is: 403 Forbidden

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:aeg:report:2019-07

Access Statistics for this paper

More papers in DIAG Technical Reports from Department of Computer, Control and Management Engineering, Universita' degli Studi di Roma "La Sapienza" Contact information at EDIRC.
Bibliographic data for series maintained by Antonietta Angelica Zucconi ( this e-mail address is bad, please contact ).