IDEAS home Printed from https://ideas.repec.org/a/aea/aecrev/v110y2020i9p2819-58.html
   My bibliography  Save this article

Nonrivalry and the Economics of Data

Author

Listed:
  • Charles I. Jones
  • Christopher Tonetti

Abstract

Data is nonrival: a person's location history, medical records, and driving data can be used by many firms simultaneously. Nonrivalry leads to increasing returns. As a result, there may be social gains to data being used broadly across firms, even in the presence of privacy considerations. Fearing creative destruction, firms may choose to hoard their data, leading to the inefficient use of nonrival data. Giving data property rights to consumers can generate allocations that are close to optimal. Consumers balance their concerns for privacy against the economic gains that come from selling data broadly.

Suggested Citation

  • Charles I. Jones & Christopher Tonetti, 2020. "Nonrivalry and the Economics of Data," American Economic Review, American Economic Association, vol. 110(9), pages 2819-2858, September.
  • Handle: RePEc:aea:aecrev:v:110:y:2020:i:9:p:2819-58
    DOI: 10.3886/E119163V1
    Note: DOI: 10.1257/aer.20191330
    as

    Download full text from publisher

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20191330
    Download Restriction: no

    File URL: https://doi.org/10.3886/E119163V1
    Download Restriction: no

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20191330.appx
    Download Restriction: no

    File URL: https://www.aeaweb.org/doi/10.1257/aer.20191330.ds
    Download Restriction: Access to full text is restricted to AEA members and institutional subscribers.

    Other versions of this item:

    References listed on IDEAS

    as
    1. Ufuk Akcigit & Murat Alp Celik & Jeremy Greenwood, 2016. "Buy, Keep, or Sell: Economic Growth and the Market for Ideas," Econometrica, Econometric Society, vol. 84, pages 943-984, May.
    2. S. Nageeb Ali & Gregory Lewis & Shoshana Vasserman, 2019. "Voluntary Disclosure and Personalized Pricing," NBER Working Papers 26592, National Bureau of Economic Research, Inc.
    3. Shota Ichihashi, 2020. "Non-competing Data Intermediaries," Staff Working Papers 20-28, Bank of Canada.
    4. Yan Carriere-Swallow & Vikram Haksar, 2019. "The Economics and Implications of Data; An Integrated Perspective," IMF Departmental Papers / Policy Papers 19/16, International Monetary Fund.
    5. Dixit, Avinash K & Stiglitz, Joseph E, 1977. "Monopolistic Competition and Optimum Product Diversity," American Economic Review, American Economic Association, vol. 67(3), pages 297-308, June.
    6. John M. Abowd & Ian M. Schmutte, 2019. "An Economic Analysis of Privacy Protection and Statistical Accuracy as Social Choices," American Economic Review, American Economic Association, vol. 109(1), pages 171-202, January.
    7. Patrick Bajari & Victor Chernozhukov & Ali Horta├žsu & Junichi Suzuki, 2019. "The Impact of Big Data on Firm Performance: An Empirical Investigation," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 33-37, May.
    8. S. Nageeb Ali & Ayal Chen-Zion & Erik Lillethun, 2020. "Reselling Information," Papers 2004.01788, arXiv.org.
    9. Sand-Zantman, Wilfried & Dosis, Anastasios, 2019. "The Ownership of Data," TSE Working Papers 19-1025, Toulouse School of Economics (TSE), revised Apr 2020.
    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. Acemoglu, Daron & Makhdoumi, Ali & Malekian, Azarakhsh & Ozdaglar, Asuman, 2019. "Too Much Data: Prices and Inefficiencies in Data Markets," CEPR Discussion Papers 14225, C.E.P.R. Discussion Papers.
    2. Ufuk Akcigit & Sina T. Ates, 2019. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," NBER Working Papers 25755, National Bureau of Economic Research, Inc.
    3. Maryam Farboodi & Roxana Mihet & Thomas Philippon & Laura Veldkamp, 2019. "Big Data and Firm Dynamics," AEA Papers and Proceedings, American Economic Association, vol. 109, pages 38-42, May.
    4. S. Nageeb Ali & Gregory Lewis & Shoshana Vasserman, 2019. "Voluntary Disclosure and Personalized Pricing," NBER Working Papers 26592, National Bureau of Economic Research, Inc.
    5. Derryl D'Silva & Zuzana Filkova & Frank Packer & Siddharth Tiwari, 2019. "The design of digital financial infrastructure: lessons from India," BIS Papers, Bank for International Settlements, number 106, April.
    6. Wendy C.Y. LI & NIREI Makoto & YAMANA Kazufumi, 2019. "Value of Data: There's No Such Thing as a Free Lunch in the Digital Economy," Discussion papers 19022, Research Institute of Economy, Trade and Industry (RIETI).
    7. Seth G. Benzell & Erik Brynjolfsson, 2019. "Digital Abundance and Scarce Genius: Implications for Wages, Interest Rates, and Growth," NBER Working Papers 25585, National Bureau of Economic Research, Inc.
    8. Ufuk Akcigit & Sina T. Ates, 2019. "Ten Facts on Declining Business Dynamism and Lessons from Endogenous Growth Theory," CESifo Working Paper Series 7849, CESifo.
    9. Maria Savona, 2019. "The Value of Data:Towards a Framework to Redistribute It," SPRU Working Paper Series 2019-21, SPRU - Science Policy Research Unit, University of Sussex Business School.
    10. Sand-Zantman, Wilfried & Dosis, Anastasios, 2019. "The Ownership of Data," TSE Working Papers 19-1025, Toulouse School of Economics (TSE), revised Apr 2020.
    11. Nikander, Pekka & Elo, Tommi, 2019. "Will the data markets necessarily fail? A position paper," 30th European Regional ITS Conference, Helsinki 2019 205201, International Telecommunications Society (ITS).
    12. Ramadorai, Tarun & Uettwiller, Antoine & Walther, Ansgar, 2019. "The Market for Data Privacy," CEPR Discussion Papers 13588, C.E.P.R. Discussion Papers.

    More about this item

    JEL classification:

    • C80 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - General
    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D21 - Microeconomics - - Production and Organizations - - - Firm Behavior: Theory
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • E22 - Macroeconomics and Monetary Economics - - Consumption, Saving, Production, Employment, and Investment - - - Investment; Capital; Intangible Capital; Capacity
    • K11 - Law and Economics - - Basic Areas of Law - - - Property Law
    • O34 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Intellectual Property and Intellectual Capital

    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:aea:aecrev:v:110:y:2020:i:9:p:2819-58. See general information about how to correct material in RePEc.

    For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: (Michael P. Albert). General contact details of provider: http://edirc.repec.org/data/aeaaaea.html .

    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 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.

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

    IDEAS is a RePEc service hosted by the Research Division of the Federal Reserve Bank of St. Louis . RePEc uses bibliographic data supplied by the respective publishers.