Privacy Regulation and Quality Investment

Lefouili, Yassine and Toh, Ying Lei (2017) Privacy Regulation and Quality Investment. TSE Working Paper, n. 17-795, Toulouse

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Official URL: http://tse-fr.eu/pub/31623

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

Item Type: Monograph (Working Paper)
Language: English
Date: April 2017
Place of Publication: Toulouse
Uncontrolled Keywords: Privacy Regulation, Data Disclosure, Quality
JEL codes: D83 - Search; Learning; Information and Knowledge; Communication; Belief
L15 - Information and Product Quality; Standardization and Compatibility
L51 - Economics of Regulation
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 13 Apr 2017 14:46
Last Modified: 24 May 2018 09:38
OAI ID: oai:tse-fr.eu:31623
URI: http://publications.ut-capitole.fr/id/eprint/23693

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