Privacy Regulation and Quality-Enhancing Innovation

Yassine Lefouili, Leonardo Madio () and Ying Lei Toh
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Leonardo Madio: University of Padova and CESifo

No 298, "Marco Fanno" Working Papers from Dipartimento di Scienze Economiche "Marco Fanno"

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)
Pages: 24 pages
Date: 2023-07
New Economics Papers: this item is included in nep-com, nep-law, nep-mfd, nep-mic and nep-reg
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https://www.economia.unipd.it/sites/economia.unipd.it/files/20230298_rev.pdf (application/pdf)

Related works:
Journal Article: Privacy Regulation and Quality‐Enhancing Innovation (2024)
Working Paper: 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)
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Persistent link: https://EconPapers.repec.org/RePEc:pad:wpaper:0298

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