Privacy Regulation and Quality-Enhancing Innovation

Yassine Lefouili, Ying Lei Toh and Leonardo Madio

No 17-795, TSE Working Papers from Toulouse School of Economics (TSE)

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)
JEL-codes: D83 L15 L51 (search for similar items in EconPapers)
Date: 2017-04, Revised 2023-07
New Economics Papers: this item is included in nep-mic and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (5)

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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:tse:wpaper:31623

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