Data Union and Regulation in a Data Economy

Lin Cong and Simon Mayer

No 30881, NBER Working Papers from National Bureau of Economic Research, Inc

Abstract: In a model of data-driven firm competition, data are jointly produced by users, buying firms’ services and contributing data, and firms, investing in data infrastructure and collection. Data collection improves services, benefiting users, but may reduce competition, harming users. Dispersed users do not internalize the impact of their data contribution on (i) service quality, (ii) competition, and (iii) firms’ investment incentives, causing inefficient data over- or underinvestment. Unlike data sharing, user privacy protection policies, or data markets, a data union — which coordinates users’ data contributions — or data trust — which intermediates data sales — can address these inefficiencies.

JEL-codes: L10 L41 L50 O30 (search for similar items in EconPapers)
Date: 2023-01
New Economics Papers: this item is included in nep-big, nep-com, nep-law, nep-pay and nep-reg
Note: CF IO PR
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