Pareto-Improving Data-Sharing

Ronen Gradwohl and Moshe Tennenholtz

Papers from arXiv.org

Abstract: We study the effects of data sharing between firms on prices, profits, and consumer welfare. Although indiscriminate sharing of consumer data decreases firm profits due to the subsequent increase in competition, selective sharing can be beneficial. We show that there are data-sharing mechanisms that are strictly Pareto-improving, simultaneously increasing firm profits and consumer welfare. Within the class of Pareto-improving mechanisms, we identify one that maximizes firm profits and one that maximizes consumer welfare.

Date: 2022-05
New Economics Papers: this item is included in nep-bec, nep-com, nep-des, nep-ind, nep-mic and nep-reg
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Persistent link: https://EconPapers.repec.org/RePEc:arx:papers:2205.11295

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