Privacy and the Value of Data

Simone Galperti and Jacopo Perego

AEA Papers and Proceedings, 2023, vol. 113, 197-203

Abstract: 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.

JEL-codes: D11 D18 D83 K24 (search for similar items in EconPapers)
Date: 2023
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Citations: View citations in EconPapers (1)

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DOI: 10.1257/pandp.20231084

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