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Privacy Regulation and Quality Investment

Yassine Lefouili and Ying Lei Toh

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

Abstract: This paper analyzes how a privacy regulation restricting data disclosure affects quality investment by a monopoly service provider - who derives revenues solely from sharing user data with third parties - and social welfare. In our model, a user's gross utility from the service depends on its quality and the amount of information shared. We show that in a fully covered market, the regulation reduces quality investment but may still be socially desirable when quality and information are not strong complements. In a partially covered market, the regulation may raise quality and social welfare even when quality and information are highly complementary

Keywords: Privacy Regulation; Data Disclosure; Quality (search for similar items in EconPapers)
JEL-codes: D83 L15 L51 (search for similar items in EconPapers)
Date: 2017-04, Revised 2019-07
New Economics Papers: this item is included in nep-mic and nep-reg
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Citations: View citations in EconPapers (4) Track citations by RSS feed

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Working Paper: Privacy Regulation and Quality Investment (2019) Downloads
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