IDEAS home Printed from https://ideas.repec.org/p/tiu/tiucen/a9a71c30-19c3-466a-9d22-1760de3ad464.html
   My bibliography  Save this paper

Trusting Privacy in the Cloud

Author

Listed:
  • Prüfer, J.O.

    (Tilburg University, Center For Economic Research)

Abstract

Cloud computing technologies have the potential to increase innovation and economic growth considerably. But many users worry that data in the cloud can be accessed by others, thereby damaging the data owner. Consequently, they do not use cloud technologies up to the efficient level. I design an institution that attenuates this problem. The scheme is built around a private, nonprofit organization called cloud association, which is governed by representatives of both cloud service providers and users, and which sources the actual auditing and certification tasks out to independent certifiers. I show how this institution incentivizes providers to produce high data security, and users to trust them and pay a premium for their services. The cloud association simultaneously solves providers’ adverse selection problem and certifiers’ moral hazard problem. By credibly implementing certified/not certified decisions, it drastically reduces the technological complexity faced by users, which boosts trust in cloud services.
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this item.)
(This abstract was borrowed from another version of this ite
(This abstract was borrowed from another version of this item.)

Suggested Citation

  • Prüfer, J.O., 2014. "Trusting Privacy in the Cloud," Discussion Paper 2014-073, Tilburg University, Center for Economic Research.
    • Handle: RePEc:tiu:tiucen:a9a71c30-19c3-466a-9d22-1760de3ad464
    as

    Download full text from publisher

    File URL: https://pure.uvt.nl/ws/portalfiles/portal/4605401/2014_073.pdf
    Download Restriction: no
    ---><---

    Other versions of this item:

    References listed on IDEAS

    as
    1. Hongbin Cai & Ginger Z. Jin & Chong Liu & Li-An Zhou, 2013. "More Trusting, Less Trust? An Investigation of Early E-Commerce in China," NBER Working Papers 18961, National Bureau of Economic Research, Inc.
    2. Jens Prüfer, 2016. "Business Associations and Private Ordering," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(2), pages 306-358.
    3. Calzolari, Giacomo & Pavan, Alessandro, 2006. "On the optimality of privacy in sequential contracting," Journal of Economic Theory, Elsevier, vol. 130(1), pages 168-204, September.
    4. Avinash Dixit, 2003. "Trade Expansion and Contract Enforcement," Journal of Political Economy, University of Chicago Press, vol. 111(6), pages 1293-1317, December.
    5. Williamson, Oliver E, 1999. "Public and Private Bureaucracies: A Transaction Cost Economics Perspective," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 15(1), pages 306-342, April.
    6. Eloïc Peyrache & Lucía Quesada, 2011. "Intermediaries, Credibility and Incentives to Collude," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 20(4), pages 1099-1133, December.
    7. Stahl, Konrad & Strausz, Roland, 2010. "Who Should Pay for Certification?," Discussion Paper Series of SFB/TR 15 Governance and the Efficiency of Economic Systems 323, Free University of Berlin, Humboldt University of Berlin, University of Bonn, University of Mannheim, University of Munich.
    8. Avner Shaked & John Sutton, 1982. "Relaxing Price Competition Through Product Differentiation," The Review of Economic Studies, Review of Economic Studies Ltd, vol. 49(1), pages 3-13.
    9. Alessandro Acquisti & Hal R. Varian, 2005. "Conditioning Prices on Purchase History," Marketing Science, INFORMS, vol. 24(3), pages 367-381, May.
    10. Strausz, Roland, 2005. "Honest certification and the threat of capture," International Journal of Industrial Organization, Elsevier, vol. 23(1-2), pages 45-62, February.
    11. Petra Christmann & Glen Taylor, 2006. "Firm self-regulation through international certifiable standards: determinants of symbolic versus substantive implementation," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 37(6), pages 863-878, November.
    12. Buehler, Benno & Schuett, Florian, 2014. "Certification and minimum quality standards when some consumers are uninformed," European Economic Review, Elsevier, vol. 70(C), pages 493-511.
    13. Mathis, Jérôme & McAndrews, James & Rochet, Jean-Charles, 2009. "Rating the raters: Are reputation concerns powerful enough to discipline rating agencies?," Journal of Monetary Economics, Elsevier, vol. 56(5), pages 657-674, July.
    14. Avinash Dixit, 2009. "Governance Institutions and Economic Activity," American Economic Review, American Economic Association, vol. 99(1), pages 5-24, March.
    15. Nicola Persico, 2015. "The Political Economy of Occupational Licensing Associations," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 31(2), pages 213-241.
    16. Juan José Ganuza & Fernando Gomez & Marta Robles, 2016. "Product Liability versus Reputation," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 32(2), pages 213-241.
    17. Federico Etro, 2011. "The Economics of Cloud Computing," The IUP Journal of Managerial Economics, IUP Publications, vol. 0(2), pages 7-22, May.
    18. Silke J. Forbes & Mara Lederman, 2013. "Contract Form and Technology Adoption in a Network Industry," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 29(2), pages 385-413, April.
    19. Dellarocas, Chrysanthos, 2003. "The Digitization of Word-of-mouth: Promise and Challenges of Online Feedback Mechanisms," Working papers 4296-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    20. Robert Gibbons & Rebecca Henderson, 2012. "Relational Contracts and Organizational Capabilities," Organization Science, INFORMS, vol. 23(5), pages 1350-1364, October.
    21. Lapo Filistrucchi & Jens Prüfer, 2019. "Faithful Strategies: How Religion Shapes Nonprofit Management," Management Science, INFORMS, vol. 65(1), pages 188-208, January.
    22. Avi Goldfarb & Catherine Tucker, 2012. "Shifts in Privacy Concerns," American Economic Review, American Economic Association, vol. 102(3), pages 349-353, May.
    23. Luís Cabral & Ali Hortaçsu, 2010. "The Dynamics Of Seller Reputation: Evidence From Ebay," Journal of Industrial Economics, Wiley Blackwell, vol. 58(1), pages 54-78, March.
    24. Chrysanthos Dellarocas & Charles A. Wood, 2008. "The Sound of Silence in Online Feedback: Estimating Trading Risks in the Presence of Reporting Bias," Management Science, INFORMS, vol. 54(3), pages 460-476, March.
    25. Shapiro, Carl & Stiglitz, Joseph E, 1984. "Equilibrium Unemployment as a Worker Discipline Device," American Economic Review, American Economic Association, vol. 74(3), pages 433-444, June.
    26. George A. Akerlof, 1970. "The Market for "Lemons": Quality Uncertainty and the Market Mechanism," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 84(3), pages 488-500.
    27. Ivan Montiel & Bryan W. Husted & Petra Christmann, 2012. "Using private management standard certification to reduce information asymmetries in corrupt environments," Strategic Management Journal, Wiley Blackwell, vol. 33(9), pages 1103-1113, September.
    28. Hayagreeva Rao, 1994. "The Social Construction of Reputation: Certification Contests, Legitimation, and the Survival of Organizations in the American Automobile Industry: 1895–1912," Strategic Management Journal, Wiley Blackwell, vol. 15(S1), pages 29-44, December.
    29. Matthew Potoski & Aseem Prakash, 2009. "Information asymmetries as trade barriers: ISO 9000 increases international commerce," Journal of Policy Analysis and Management, John Wiley & Sons, Ltd., vol. 28(2), pages 221-238.
    30. Scott E. Masten & Jens Prüfer, 2014. "On the Evolution of Collective Enforcement Institutions: Communities and Courts," The Journal of Legal Studies, University of Chicago Press, vol. 43(2), pages 359-400.
    31. Chrysanthos Dellarocas, 2003. "The Digitization of Word of Mouth: Promise and Challenges of Online Feedback Mechanisms," Management Science, INFORMS, vol. 49(10), pages 1407-1424, October.
    32. David Rahman, 2012. "But Who Will Monitor the Monitor?," American Economic Review, American Economic Association, vol. 102(6), pages 2767-2797, October.
    33. Dengler, Sebastian & Prüfer, Jens, 2021. "Consumers' privacy choices in the era of big data," Games and Economic Behavior, Elsevier, vol. 130(C), pages 499-520.
    34. Mary J. Culnan & Pamela K. Armstrong, 1999. "Information Privacy Concerns, Procedural Fairness, and Impersonal Trust: An Empirical Investigation," Organization Science, INFORMS, vol. 10(1), pages 104-115, February.
    35. Paulo Albuquerque & Bart J. Bronnenberg & Charles J. Corbett, 2007. "A Spatiotemporal Analysis of the Global Diffusion of ISO 9000 and ISO 14000 Certification," Management Science, INFORMS, vol. 53(3), pages 451-468, March.
    36. Terrence August & Marius Florin Niculescu & Hyoduk Shin, 2014. "Cloud Implications on Software Network Structure and Security Risks," Information Systems Research, INFORMS, vol. 25(3), pages 489-510, September.
    37. Lingfang (Ivy) Li & Erte Xiao, 2014. "Money Talks: Rebate Mechanisms in Reputation System Design," Management Science, INFORMS, vol. 60(8), pages 2054-2072, August.
    38. Curtis R. Taylor, 2004. "Consumer Privacy and the Market for Customer Information," RAND Journal of Economics, The RAND Corporation, vol. 35(4), pages 631-650, Winter.
    39. Kee-Hong Bae & Lynnette Purda & Michael Welker & Ligang Zhong, 2013. "Credit rating initiation and accounting quality for emerging-market firms," Journal of International Business Studies, Palgrave Macmillan;Academy of International Business, vol. 44(3), pages 216-234, April.
    40. Ramon Casadesus-Masanell & Andres Hervas-Drane, 2015. "Competing with Privacy," Management Science, INFORMS, vol. 61(1), pages 229-246, January.
    41. Oliver E. Williamson, 2002. "The Lens of Contract: Private Ordering," American Economic Review, American Economic Association, vol. 92(2), pages 438-443, May.
    42. Alexandre de Cornière & Romain de Nijs, 2016. "Online advertising and privacy," RAND Journal of Economics, RAND Corporation, vol. 47(1), pages 48-72, February.
    43. Christina Aperjis & Ramesh Johari, 2010. "Optimal Windows for Aggregating Ratings in Electronic Marketplaces," Management Science, INFORMS, vol. 56(5), pages 864-880, May.
    44. Yannis Bakos & Chrysanthos Dellarocas, 2011. "Cooperation Without Enforcement? A Comparative Analysis of Litigation and Online Reputation as Quality Assurance Mechanisms," Management Science, INFORMS, vol. 57(11), pages 1944-1962, November.
    45. Bakos, Yannis & Dellarocas, Chrysanthos, 2003. "Cooperation Without Enforcement? A comparative analysis of litigation and online reputation as quality assurance mechanisms," Working papers 4295-03, Massachusetts Institute of Technology (MIT), Sloan School of Management.
    46. James Campbell & Avi Goldfarb & Catherine Tucker, 2015. "Privacy Regulation and Market Structure," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(1), pages 47-73, March.
    47. Janice Y. Tsai & Serge Egelman & Lorrie Cranor & Alessandro Acquisti, 2011. "The Effect of Online Privacy Information on Purchasing Behavior: An Experimental Study," Information Systems Research, INFORMS, vol. 22(2), pages 254-268, June.
    48. Greif, Avner & Milgrom, Paul & Weingast, Barry R, 1994. "Coordination, Commitment, and Enforcement: The Case of the Merchant Guild," Journal of Political Economy, University of Chicago Press, vol. 102(4), pages 745-776, August.
    49. Alexandre de Corniere & Romain De Nijs, 2013. "Online Advertising and Privacy," Economics Series Working Papers 650, University of Oxford, Department of Economics.
    50. Michael Spence, 1973. "Job Market Signaling," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 87(3), pages 355-374.
    Full references (including those not matched with items on IDEAS)

    Citations

    Citations are extracted by the CitEc Project, subscribe to its RSS feed for this item.
    as


    Cited by:

    1. Graef, Inge & Prüfer, Jens, 2021. "Governance of data sharing: A law & economics proposal," Research Policy, Elsevier, vol. 50(9).
    2. Sajeesh, S. & Singh, Ashutosh & Bhardwaj, Pradeep, 2022. "Optimal checkout strategies for online retailers," Journal of Retailing, Elsevier, vol. 98(3), pages 378-394.
    3. Vineet Paliwal & Shalini Chandra & Suneel Sharma, 2020. "Blockchain Technology for Sustainable Supply Chain Management: A Systematic Literature Review and a Classification Framework," Sustainability, MDPI, vol. 12(18), pages 1-39, September.

    Most related items

    These are the items that most often cite the same works as this one and are cited by the same works as this one.
    1. Prüfer, J.O., 2014. "Trusting Privacy in the Cloud," Other publications TiSEM 556bdb81-1b26-4692-877c-1, Tilburg University, School of Economics and Management.
    2. Prüfer, J.O., 2014. "Trusting Privacy in the Cloud," Other publications TiSEM a9a71c30-19c3-466a-9d22-1, Tilburg University, School of Economics and Management.
    3. Dengler, Sebastian & Prüfer, Jens, 2021. "Consumers' privacy choices in the era of big data," Games and Economic Behavior, Elsevier, vol. 130(C), pages 499-520.
    4. Jin, Ginger Zhe & Wagman, Liad, 2021. "Big data at the crossroads of antitrust and consumer protection," Information Economics and Policy, Elsevier, vol. 54(C).
    5. Morlok, Tina & Matt, Christian & Hess, Thomas, 2017. "Privatheitsforschung in den Wirtschaftswissenschaften: Entwicklung, Stand und Perspektiven," Working Papers 1/2017, University of Munich, Munich School of Management, Institute for Information Systems and New Media.
    6. Avi Goldfarb, 2014. "What is Different About Online Advertising?," Review of Industrial Organization, Springer;The Industrial Organization Society, vol. 44(2), pages 115-129, March.
    7. Caleb S. Fuller, 2018. "Privacy law as price control," European Journal of Law and Economics, Springer, vol. 45(2), pages 225-250, April.
    8. Annika Veh & Markus Göbel & Rick Vogel, 2019. "Corporate reputation in management research: a review of the literature and assessment of the concept," Business Research, Springer;German Academic Association for Business Research, vol. 12(2), pages 315-353, December.
    9. Michael Kummer & Patrick Schulte, 2019. "When Private Information Settles the Bill: Money and Privacy in Google’s Market for Smartphone Applications," Management Science, INFORMS, vol. 65(8), pages 3470-3494, August.
    10. Dominik Gutt & Jürgen Neumann & Steffen Zimmermann & Dennis Kundisch & Jianqing Chen, 2018. "Design of Review Systems - A Strategic Instrument to shape Online Review Behavior and Economic Outcomes," Working Papers Dissertations 42, Paderborn University, Faculty of Business Administration and Economics.
    11. Antonio Moreno & Christian Terwiesch, 2014. "Doing Business with Strangers: Reputation in Online Service Marketplaces," Information Systems Research, INFORMS, vol. 25(4), pages 865-886, December.
    12. Marreiros, Helia & Tonin, Mirco & Vlassopoulos, Michael & Schraefel, M.C., 2017. "“Now that you mention it”: A survey experiment on information, inattention and online privacy," Journal of Economic Behavior & Organization, Elsevier, vol. 140(C), pages 1-17.
    13. Esther Gal-Or & Ronen Gal-Or & Nabita Penmetsa, 2018. "The Role of User Privacy Concerns in Shaping Competition Among Platforms," Information Systems Research, INFORMS, vol. 29(3), pages 698-722, September.
    14. W. Bentley MacLeod, 2006. "Reputations, Relationships and the Enforcement of Incomplete Contracts," CESifo Working Paper Series 1730, CESifo.
    15. Helia Marreiros & Mirco Tonin & Michael Vlassopoulos & M.C. Schraefel, 2016. "“Now that you mention it”: A Survey Experiment on Information, Salience and Online Privacy," BEMPS - Bozen Economics & Management Paper Series BEMPS34, Faculty of Economics and Management at the Free University of Bozen.
    16. Luís Cabral & Lingfang (Ivy) Li, 2015. "A Dollar for Your Thoughts: Feedback-Conditional Rebates on eBay," Management Science, INFORMS, vol. 61(9), pages 2052-2063, September.
    17. Anna D’Annunzio & Antonio Russo, 2020. "Ad Networks and Consumer Tracking," Management Science, INFORMS, vol. 66(11), pages 5040-5058, November.
    18. Mingfeng Lin & Yong Liu & Siva Viswanathan, 2018. "Effectiveness of Reputation in Contracting for Customized Production: Evidence from Online Labor Markets," Management Science, INFORMS, vol. 64(1), pages 345-359, January.
    19. Belleflamme,Paul & Peitz,Martin, 2015. "Industrial Organization," Cambridge Books, Cambridge University Press, number 9781107687899.
    20. Alessandro Bonatti, 2023. "The Platform Dimension of Digital Privacy," NBER Chapters, in: The Economics of Privacy, National Bureau of Economic Research, Inc.

    More about this item

    Keywords

    cloud computing; privacy; data security; trust; associations; certification; Economic Governance; private ordering; market design;
    All these keywords.

    JEL classification:

    • D02 - Microeconomics - - General - - - Institutions: Design, Formation, Operations, and Impact
    • D71 - Microeconomics - - Analysis of Collective Decision-Making - - - Social Choice; Clubs; Committees; Associations
    • L24 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Contracting Out; Joint Ventures
    • L31 - Industrial Organization - - Nonprofit Organizations and Public Enterprise - - - Nonprofit Institutions; NGOs; Social Entrepreneurship
    • L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software

    Statistics

    Access and download statistics

    Corrections

    All material on this site has been provided by the respective publishers and authors. You can help correct errors and omissions. When requesting a correction, please mention this item's handle: RePEc:tiu:tiucen:a9a71c30-19c3-466a-9d22-1760de3ad464. See general information about how to correct material in RePEc.

    If you have authored this item and are not yet registered with RePEc, we encourage you to do it here. This allows to link your profile to this item. It also allows you to accept potential citations to this item that we are uncertain about.

    If CitEc recognized a bibliographic reference but did not link an item in RePEc to it, you can help with this form .

    If you know of missing items citing this one, you can help us creating those links by adding the relevant references in the same way as above, for each refering item. If you are a registered author of this item, you may also want to check the "citations" tab in your RePEc Author Service profile, as there may be some citations waiting for confirmation.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: Richard Broekman (email available below). General contact details of provider: http://center.uvt.nl .

    Please note that corrections may take a couple of weeks to filter through the various RePEc services.

    IDEAS is a RePEc service. RePEc uses bibliographic data supplied by the respective publishers.