“I don't care about cookies!” data disclosure and time-inconsistent users

Laura Abrardi, Carlo Cambini and Steffen Hoernig

Information Economics and Policy, 2024, vol. 69, issue C

Abstract: Time-inconsistent internet users neglect future privacy costs and release too much data to digital firms. We study how regulation that requires user consent for data processing affects firm profits, user surplus, and welfare, depending on the degree of time inconsistency and on firms' business models. If the firm appropriates sufficiently high profits from data, consent mechanisms increase welfare only if their design facilitates consent refusal and time inconsistency is neither too high nor too low. If firms can make it difficult to opt out, it may be better for society to let the former choose the disclosure level. However, consent policies increase user surplus when time inconsistency is high. Voluntary caps on usage can raise profits by making some users disclose more data.

Keywords: Data disclosure; Time inconsistency; Privacy (search for similar items in EconPapers)
JEL-codes: D82 D83 D86 L12 L51 (search for similar items in EconPapers)
Date: 2024
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Persistent link: https://EconPapers.repec.org/RePEc:eee:iepoli:v:69:y:2024:i:c:s0167624524000349

DOI: 10.1016/j.infoecopol.2024.101112

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