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Montes, Rodrigo, Sand-Zantman, Wilfried
and Valletti, Tommaso M.
(2015)
The value of personal information in online markets with endogenous privacy.
TSE Working Paper, n. 15-583, Toulouse
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Abstract
This paper investigates the effects of price discrimination on prices, profits and consumer surplus, when one or more competing firms can use consumers' private information to price discriminate and consumers can pay a privacy cost to avoid it. While a monopolist always benefits from higher privacy costs, this is not true in the competing duopoly case. In this last case, firms' individual profits are decreasing while consumer surplus is increasing in the privacy cost. Finally, under competition, we show that the optimal selling strategy for the owner of consumer data consists in dealing exclusively with one firm in order to create maximal competition between the winner and the loser of data. This brings ineficiencies, and we show that policy makers should concentrate their attention on exclusivity deals rather than making it easier for consumers to protect their privacy.
| Item Type: | Monograph (Working Paper) |
|---|---|
| Language: | English |
| Date: | May 2015 |
| Place of Publication: | Toulouse |
| Uncontrolled Keywords: | Privacy, Information, Price Discrimination |
| Subjects: | B- ECONOMIE ET FINANCE |
| Divisions: | TSE-R (Toulouse) |
| Institution: | Université Toulouse 1 Capitole |
| Site: | UT1 |
| Date Deposited: | 21 Sep 2015 13:08 |
| Last Modified: | 02 Apr 2021 15:49 |
| OAI Identifier: | oai:tse-fr.eu:29367 |
| URI: | https://publications.ut-capitole.fr/id/eprint/18364 |
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