Carpe Data: Protecting online privacy with naive users

Laura Abrardi and Carlo Cambini

Information Economics and Policy, 2022, vol. 60, issue C

Abstract: In this paper, we study the optimal design of incentives to induce a digital platform to limit the extraction of data from users, whose privacy loss is further aggravated by their naive use of the platform. We show that caps on the amount of data collected can induce the optimal data-saving effort by the platform. If the platform’s effort is not observable, a menu of data caps should be provided and it entails a higher (lower) loss of privacy for less (more) naive users, relative to the first best. We also show that compensating users for their data can efficiently incentivize effort, but might increase the privacy loss of more naive users.

Keywords: Data extraction; Incentives; Users’ naivety; Privacy (search for similar items in EconPapers)
JEL-codes: D82 D83 D86 L12 L51 (search for similar items in EconPapers)
Date: 2022
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:60:y:2022:i:c:s0167624522000270

DOI: 10.1016/j.infoecopol.2022.100988

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