Data Fiduciary in Order to Alleviate Principal–Agent Problems in the Artificial Big Data Age

Julia Puaschunder ()

Chapter 2 in Information for Efficient Decision Making:Big Data, Blockchain and Relevance, 2020, pp 41-90 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The classic principal–agent problem in political science and economics describes agency dilemmas or problems when one person, the agent, is put in a situation to make decisions on behalf of another entity, the principal. A dilemma occurs in situations when individual profit maximization or principal and agent are pitted against each other. This so-called moral hazard is emerging in the current artificial big data age, when big data reaping entities have to act on behalf of agents, who provide their data with trust in the principal’s integrity and responsible big data conduct. Yet, to this day, no data fiduciary has been clearly described and established to protect the agent from misusing the data. This paper introduces the agent’s predicament between utility derived from information sharing and dignity in privacy as well as hyper-hyperbolic discounting fallibilities to not clearly foresee what consequences information sharing can have over time and in groups. The principal’s predicament between secrecy and selling big data insights or using big data for manipulative purposes will be outlined. Finally, the paper draws a clear distinction between manipulation and nudging in relation to the potential social class division of those who nudge and those who are nudged.

Keywords: Accounting; Decision Making; Economic Information; Stock Trading; Acquisitions; Mergers; Financing Reporting; Reliable Information; Company Decisions (search for similar items in EconPapers)
JEL-codes: A1 M41 (search for similar items in EconPapers)
Date: 2020
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Citations: View citations in EconPapers (4)

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