Privacy regulation and quality-enhancing innovation

Yassine Lefouili, Leonardo Madio () and Ying Lei Toh ()
Additional contact information
Leonardo Madio: Unipd - Università degli Studi di Padova = University of Padua
Ying Lei Toh: Federal Reserve Bank - Kansas City

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Abstract: We analyze how a privacy regulation taking the form of a cap on information disclosure affects quality-enhancing innovation incentives by a monopolist--who derives revenues solely from disclosing user data to third parties--and consumer surplus. If the share of privacy-concerned users is sufficiently small, privacy regulation has a negative effect on innovation and may harm users. However, if the share of privacy-concerned users is sufficiently large, privacy regulation has a positive effect on innovation. In this case, there is no trade-off between privacy and innovation and users always benefit from privacy regulation.

Keywords: Privacy Regulation; Data Disclosure; Innovation (search for similar items in EconPapers)
Date: 2024
New Economics Papers: this item is included in nep-eur, nep-law, nep-mic and nep-reg
Note: View the original document on HAL open archive server: https://hal.science/hal-04774302v1
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Citations: View citations in EconPapers (1)

Published in Journal of Industrial Economics, 2024, 72 (2), pp.662-684. ⟨10.1111/joie.12374⟩

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Related works:
Journal Article: Privacy Regulation and Quality‐Enhancing Innovation (2024)
Working Paper: Privacy Regulation and Quality-Enhancing Innovation (2023)
Working Paper: Privacy Regulation and Quality-Enhancing Innovation (2023)
Working Paper: Privacy Regulation and Quality-Enhancing Innovation (2023)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-04774302

DOI: 10.1111/joie.12374

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