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The effect of privacy regulation on the data industry: empirical evidence from GDPR

Author

Listed:
  • Guy Aridor
  • Yeon‐Koo Che
  • Tobias Salz

Abstract

Utilizing a novel dataset from an online travel intermediary, we study the effects of the EU's General Data Protection Regulation (GDPR). The opt‐in requirement of GDPR resulted in a 12.5% drop in the intermediary‐observed consumers, but the remaining consumers are trackable for a longer period of time. Our findings imply that privacy‐conscious consumers exert privacy externalities on opt‐in consumers, making them more predictable. Consistent with this finding, the average value of the remaining consumers to advertisers has increased, offsetting some of the losses from consumer opt‐outs.

Suggested Citation

  • Guy Aridor & Yeon‐Koo Che & Tobias Salz, 2023. "The effect of privacy regulation on the data industry: empirical evidence from GDPR," RAND Journal of Economics, RAND Corporation, vol. 54(4), pages 695-730, December.
    • Handle: RePEc:bla:randje:v:54:y:2023:i:4:p:695-730
    DOI: 10.1111/1756-2171.12455
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    References listed on IDEAS

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    Cited by:

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    3. Siavash Mohades & Maria Savona, 2025. "Uncertainty and Investments in Data and R&D," CESifo Working Paper Series 12230, CESifo.
    4. Nicholas Buchholz & Laura Doval & Jakub Kastl & Filip Matejka & Tobias Salz, 2025. "Personalized Pricing and the Value of Time: Evidence From Auctioned Cab Rides," Econometrica, Econometric Society, vol. 93(3), pages 929-958, May.
    5. Beknazar-Yuzbashev, George & Jimenez-Duran, Rafael & Simonov, Andrey & Mateusz Stalinsk, Mateusz, 2026. "Social Media Advertising Loads as Prices," The Warwick Economics Research Paper Series (TWERPS) 1602, University of Warwick, Department of Economics.
    6. Ke Rong & Yunshu Ling & Tianxi Yang & Cheng Huang, 2025. "Cross-border data transfer: patterns and discrepancies," Journal of International Business Policy, Palgrave Macmillan, vol. 8(1), pages 10-32, March.
    7. Fasheng Xu & Xiaoyu Wang & Fuqiang Zhang, 2025. "Consumer Privacy in Online Retail Supply Chains," Management Science, INFORMS, vol. 71(10), pages 8371-8389, October.
    8. Beknazar-Yuzbashev, George & Ichiba, Sota & Stalinski, Mateusz, 2025. "To the Depths of the Sunk Cost: Experiments Revisiting the Elusive Effect," CAGE Online Working Paper Series 746, Competitive Advantage in the Global Economy (CAGE).
    9. Beknazar-Yuzbashev, George & Ichiba, Sota & Stalinski, Mateusz, 2025. "To the Depths of the Sunk Cost : Experiments Revisiting the Elusive Effect," The Warwick Economics Research Paper Series (TWERPS) 1544, University of Warwick, Department of Economics.
    10. Sarit Markovich & Yaron Yehezkel, 2026. "Competing for Cookies: Platforms’ Business Models in Data Markets with Network Effects," Management Science, INFORMS, vol. 72(2), pages 915-931, February.
    11. Michele Bisceglia & Alessandro Bonatti & Fiona Scott Morton, 2025. "Regulating Privacy Policies on Digital Platforms," Cowles Foundation Discussion Papers 2474, Cowles Foundation for Research in Economics, Yale University.
    12. Chongwoo Choe & Noriaki Matsushima & Shiva Shekhar, 2025. "The Bright Side of the GDPR: Welfare-Improving Privacy Management," Management Science, INFORMS, vol. 71(8), pages 6836-6858, August.
    13. Kostas Bimpikis & Ilan Morgenstern & Daniela Saban, 2024. "Data Tracking Under Competition," Operations Research, INFORMS, vol. 72(2), pages 514-532, March.
    14. Fang, Yuhan & Kawaguchi, Kohei, 2025. "Estimating the Value of Retargeting in the Online Advertising Market," SocArXiv j34t8_v3, Center for Open Science.
    15. Ruizhi Zhu & Sridhar Moorthy & Xianwen Shi, 2025. "Advertising Platforms and Privacy," Marketing Science, INFORMS, vol. 44(6), pages 1381-1406, November.
    16. Chongwoo Choe & Jiajia Cong & Noriaki Matsushima & Shiva Shekhar, 2025. "Privacy Regulations, Consumer Empowerment, and Versioning," CESifo Working Paper Series 11769, CESifo.
    17. Chen, Wanyi & Wang, Yiying & Wu, Dongjing & Yin, Xingqiang, 2024. "Can the establishment of a personal data protection system promote corporate innovation?," Research Policy, Elsevier, vol. 53(9).
    18. Vincent Lefrere & Logan Warberg & Cristobal Cheyre & Veronica Marotta & Alessandro Acquisti, 2026. "Does Privacy Regulation Harm Content Providers? A Longitudinal Analysis of the Impact of the GDPR," Management Science, INFORMS, vol. 72(3), pages 1727-1747, March.
    19. Wu, Wei & Han, Wei, 2025. "Does digital platform governance improve process innovation? Evidence from Apple's tracking policies," Economic Modelling, Elsevier, vol. 152(C).
    20. Beknazar-Yuzbashev, George & Jiménez-Durán, Rafael & Simonov, Andrey & Stalinski, Mateusz, 2026. "Social Media Advertising Loads as Prices," CAGE Online Working Paper Series 792, Competitive Advantage in the Global Economy (CAGE).
    21. Paulich, Brianna JeeWon & Cheng, Yichen & Shah, Denish, 2026. "Managing conversions of anonymous online users: a privacy-compliant framework," Journal of Business Research, Elsevier, vol. 202(C).

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