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The Economics of Privacy

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  • Kai-Lung Hui

    (National University of Singapore)

  • I.P.L. Png

    (National University of Singapore)

Abstract

This chapter reviews economic analyses of privacy. We begin by scrutinizing the “free market” critique of privacy regulation. Welfare may be non-monotone in the quantity of information, hence there may be excessive incentive to collect information. This result applies to both non-productive and productive information. Over-investment is exacerbated to the extent that personal information is exploited across markets. Further, the “free market” critique does not apply to overt and covert collection of information that directly causes harm. We then review research on property rights and challenges in determining their optimal allocation. We conclude with insights from recent empirical research and directions for future research.

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File URL: http://128.118.178.162/eps/io/papers/0505/0505007.pdf
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Bibliographic Info

Paper provided by EconWPA in its series Industrial Organization with number 0505007.

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Length: 54 pages
Date of creation: 19 May 2005
Date of revision: 29 Aug 2005
Handle: RePEc:wpa:wuwpio:0505007

Note: Type of Document - pdf; pages: 54
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Web page: http://128.118.178.162

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Cited by:
  1. Aidan Hollis & Jason Strauss, 2008. "Privacy, Driving Data and Automobile Insurance: An Economic Analysis," Working Papers 2008-13, Department of Economics, University of Calgary, revised 14 Feb 2008.
  2. Simon P. Anderson & André de Palma, 2009. "Information congestion," RAND Journal of Economics, RAND Corporation, vol. 40(4), pages 688-709.
  3. Hugo Mialon & Sue Mialon, 2008. "The Economics of Search Warrants," Emory Economics 0810, Department of Economics, Emory University (Atlanta).
  4. Yoan Hermstrüwer & Stephan Dickert, 2013. "Tearing the Veil of Privacy Law: An Experiment on Chilling Effects and the Right to Be Forgotten," Working Paper Series of the Max Planck Institute for Research on Collective Goods 2013_15, Max Planck Institute for Research on Collective Goods.

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