Too Much Data: Prices and Inefficiencies in Data Markets

Daron Acemoglu, Ali Makhdoumi, Azarakhsh Malekian and Asu Ozdaglar

American Economic Journal: Microeconomics, 2022, vol. 14, issue 4, 218-56

Abstract: When a user shares her data with online platforms, she reveals information about others. In such a setting, externalities depress the price of data because once a user's information is leaked by others, she has less reason to protect her data and privacy. These depressed prices lead to excessive data sharing. We characterize conditions under which shutting down data markets improves welfare. Platform competition does not redress the problem of excessively low data prices and too much data sharing and may further reduce welfare. We propose a scheme based on mediated data sharing that improves efficiency.

JEL-codes: D62 D83 H23 L51 L86 L88 (search for similar items in EconPapers)
Date: 2022
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Citations: View citations in EconPapers (29)

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Related works:
Working Paper: Too Much Data: Prices and Inefficiencies in Data Markets (2019)
Working Paper: Too Much Data: Prices and Inefficiencies in Data Markets (2019)
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DOI: 10.1257/mic.20200200

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