The Economics of Social Data

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

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

Abstract: A data intermediary pays consumers for information about their preferences and sells the information so acquired to firms that use it to tailor their products and prices. The social dimension of the individual data - whereby an individual's data are predictive of the behavior of others - generates a data externality that reduces the intermediary's cost of acquiring information. We derive the intermediary's optimal data policy and show that it preserves the privacy of the consumers' identities while providing precise information about market demand to the firms. This enables the intermediary to capture the entire value of information as the number of consumers grows large.

Keywords: Social data; Personal information; Consumer privacy; Privacy paradox; Data intermediaries; Data externality; Data flow; Data policy; Data rights (search for similar items in EconPapers)
JEL-codes: D44 D82 D83 (search for similar items in EconPapers)
Pages: 63 pages
Date: 2019-09, Revised 2020-03
New Economics Papers: this item is included in nep-ict, nep-mic, nep-pay and nep-soc
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (20)

Downloads: (external link)
https://cowles.yale.edu/sites/default/files/files/pub/d22/d2203-r.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

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 (2019)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:2203r

Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.

Access Statistics for this paper

More papers in Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University Yale University, Box 208281, New Haven, CT 06520-8281 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Brittany Ladd ().