The Economics of Social Data

Dirk Bergemann, Alessandro Bonatti and Tan Gan ()
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Tan Gan: Department of Economics, Yale University, https://economics.yale.edu/

No 2203, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: We propose a model of data intermediation to analyze the incentives for sharing individual data in the presence of informational externalities. A data intermediary acquires signals from individual consumers regarding theirpreferences. The intermediary resells the information in a product market in which firms and consumers can tailor their choices to the demand data. The social dimension of the individual data - whereby an individual's data are predictive of the behavior of others - generates a data externality that can reduce the intermediary's cost of acquiring information. We derive the intermediary's optimal data policy and establish that it preserves the privacy of consumer identities while providing precise information about market demand to the firms. This policy enables the intermediary to capture the total value of the information as the number of consumers becomes large.

Keywords: Consumer privacy, Social data; Personal information, Data intermediaries, data flow, Data policy, Data rights, Collaborative filtering (search for similar items in EconPapers)
JEL-codes: D44 D82 D83 (search for similar items in EconPapers)
Pages: 60 pages
Date: 2019-09
New Economics Papers: this item is included in nep-mic and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (16)

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Related works:
Journal Article: The economics of social data (2022)
Working Paper: The Economics of Social Data (2022)
Working Paper: The Economics of Social Data (2021)
Working Paper: The Economics of Social Data (2021)
Working Paper: The Economics of Social Data (2020)
Working Paper: The Economics of Social Data (2020)
Working Paper: The Economics of Social Data (2020)
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