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 2203R4, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: A data intermediary acquires signals from individual consumers regarding their preferences. The intermediary resells the information in a product market wherein firms and consumers tailor their choices to the demand data. The social dimension of the individual data -whereby a consumer's data are predictive of others' behavior- generates a data externality that can reduce the intermediary's cost of acquiring the information. The intermediary optimally preserves the privacy of consumers' identities if and only if doing so increases social surplus. This policy enables the intermediary to capture the total value of the information as the number of consumers becomes 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: 58 pages
Date: 2019-09, Revised 2021-10
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

Published in Rand Journal of Economics, (May 2022), 53(2): 263-296

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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 (2020)
Working Paper: The Economics of Social Data (2020)
Working Paper: The Economics of Social Data (2020)
Working Paper: The Economics of Social Data (2019)
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