IDEAS home Printed from https://ideas.repec.org/a/eee/poleco/v67y2021ics0176268020301154.html

Privacy rights in online interactions and litigation dynamics: A social custom view

Author

Listed:
  • Dughera, Stefano
  • Giraudo, Marco

Abstract

We develop a social custom model where a population of social media users decide whether to remain online and accept the platform’s data-gathering policy or abandon the social media and litigate for privacy violations. By allowing the users’ concerns for informational security to co-evolve with the number of privacy-related trials, we find that the system may converge to multiple equilibria. When users put relative emphasis on the relational benefits of online interactions, privacy-related trials remain contained and the provider imposes no limitations to its data-gathering activities. Conversely, when users put relative emphasis on the privacy costs of web-mediated interactions, privacy-related trials become endemic and platforms modulate their data-gathering activities by mediating between profitability and the legal implications of their choice. We use these results to comment the recent shift in the users’ orientation towards online platforms and caution against the inability of institutions to keep up with the process of technological change.

Suggested Citation

  • Dughera, Stefano & Giraudo, Marco, 2021. "Privacy rights in online interactions and litigation dynamics: A social custom view," European Journal of Political Economy, Elsevier, vol. 67(C).
    • Handle: RePEc:eee:poleco:v:67:y:2021:i:c:s0176268020301154
    DOI: 10.1016/j.ejpoleco.2020.101967
    as

    Download full text from publisher

    File URL: http://www.sciencedirect.com/science/article/pii/S0176268020301154
    Download Restriction: Full text for ScienceDirect subscribers only
    File URL: https://libkey.io/10.1016/j.ejpoleco.2020.101967?utm_source=ideas
    LibKey link: if access is restricted and if your library uses this service, LibKey will redirect you to where you can use your library subscription to access this item
    ---><---

    As the access to this document is restricted, you may want to

    for a different version of it.

    References listed on IDEAS

    as
    1. Waldfogel, Joel, 1998. "Reconciling Asymmetric Information and Divergent Expectations Theories of Litigation," Journal of Law and Economics, University of Chicago Press, vol. 41(2), pages 451-476, October.
    2. George J. Stigler, 1980. "An Introduction to Privacy in Economics and Politics," University of Chicago - George G. Stigler Center for Study of Economy and State 10, Chicago - Center for Study of Economy and State.
    3. Schudy, Simeon & Utikal, Verena, 2017. "‘You must not know about me’—On the willingness to share personal data," Journal of Economic Behavior & Organization, Elsevier, vol. 141(C), pages 1-13.
    4. Antoci, Angelo & Sabatini, Fabio & Sodini, Mauro, 2012. "See you on Facebook! A framework for analyzing the role of computer-mediated interaction in the evolution of social capital," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 41(5), pages 541-547.
    5. Hermstrüwer, Yoan & Dickert, Stephan, 2017. "Sharing is daring: An experiment on consent, chilling effects and a salient privacy nudge," International Review of Law and Economics, Elsevier, vol. 51(C), pages 38-49.
    6. George A. Akerlof, 1980. "A Theory of Social Custom, of which Unemployment may be One Consequence," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 94(4), pages 749-775.
    7. Alison L. Booth, 1985. "The Free Rider Problem and a Social Custom Model of Trade Union Membership," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 100(1), pages 253-261.
    8. Ichino, Andrea & Polo, Michele & Rettore, Enrico, 2003. "Are judges biased by labor market conditions?," European Economic Review, Elsevier, vol. 47(5), pages 913-944, October.
    9. Bonnín Roca, Jaime & Vaishnav, Parth & Morgan, M.Granger & Mendonça, Joana & Fuchs, Erica, 2017. "When risks cannot be seen: Regulating uncertainty in emerging technologies," Research Policy, Elsevier, vol. 46(7), pages 1215-1233.
    10. Posner, Richard A, 1981. "The Economics of Privacy," American Economic Review, American Economic Association, vol. 71(2), pages 405-409, May.
      • Posner, Richard A., 1980. "The Economics of Privacy," Working Papers 16, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    11. Chang, Juin-jen & Lai, Ching-chong, 1999. "Carrots or sticks? A social custom viewpoint on worker effort," European Journal of Political Economy, Elsevier, vol. 15(2), pages 297-310, June.
    12. Juin‐jen Chang & Ching‐chong Lai, 2002. "Is the Efficiency Wage Efficient? The Social Norm and Organizational Corruption," Scandinavian Journal of Economics, Wiley Blackwell, vol. 104(1), pages 27-47, March.
    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. Aziz N. Berdiev & Rajeev K. Goel & James W. Saunoris, 2024. "Global cryptocurrency use, corruption, and the shadow economy: New insights into the underlying linkages," American Journal of Economics and Sociology, Wiley Blackwell, vol. 83(3), pages 609-629, May.
    2. Bjørnskov, Christian & Schröder, Philipp J.H., 2023. "Press freedom, market information, and international trade," European Journal of Political Economy, Elsevier, vol. 76(C).

    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. Dughera, Stefano & Giraudo, Marco, 2020. "Privacy Rights in Online Interactions and Litigation Dynamics: a Social Custom View," Department of Economics and Statistics Cognetti de Martiis. Working Papers 202003, University of Turin.
    2. Goerke Laszlo & Pannenberg Markus, 2004. "Norm-Based Trade Union Membership: Evidence for Germany," German Economic Review, De Gruyter, vol. 5(4), pages 481-504, December.
    3. Hermstrüwer, Yoan & Dickert, Stephan, 2017. "Sharing is daring: An experiment on consent, chilling effects and a salient privacy nudge," International Review of Law and Economics, Elsevier, vol. 51(C), pages 38-49.
    4. Simeon Schudy & Verena Utikal, 2015. "Does imperfect data privacy stop people from collecting personal health data?," TWI Research Paper Series 98, Thurgauer Wirtschaftsinstitut, Universität Konstanz.
    5. Jongwoo Kim & Richard L. Baskerville & Yi Ding, 2020. "Breaking the Privacy Kill Chain: Protecting Individual and Group Privacy Online," Information Systems Frontiers, Springer, vol. 22(1), pages 171-185, February.
    6. Bouckaert, J.M.C. & Degryse, H.A., 2006. "Opt In versus Opt Out : A Free-Entry Analysis of Privacy Policies," Other publications TiSEM 17393c5d-1ed2-47ec-bc96-9, Tilburg University, School of Economics and Management.
    7. Claudia Keser & Jean-Louis Rullière & Marie Claire Villeval, 2004. "Le paradoxe de l'adhésion syndicale : une approche expérimentale en termes de jeu de bien public," Economie & Prévision, La Documentation Française, vol. 0(3), pages 81-92.
    8. Daron Acemoglu & Ali Makhdoumi & Azarakhsh Malekian & Asu Ozdaglar, 2022. "Too Much Data: Prices and Inefficiencies in Data Markets," American Economic Journal: Microeconomics, American Economic Association, vol. 14(4), pages 218-256, November.
    9. Volker Benndorf, 2018. "Voluntary Disclosure of Private Information and Unraveling in the Market for Lemons: An Experiment," Games, MDPI, vol. 9(2), pages 1-17, May.
    10. Simon Gächter & Ernst Fehr, 1997. "Social Norms as a Social Exchange," Swiss Journal of Economics and Statistics (SJES), Swiss Society of Economics and Statistics (SSES), vol. 133(II), pages 275-292, June.
    11. Catherine E. Tucker, 2023. "The Economics of Privacy: An Agenda," NBER Chapters, in: The Economics of Privacy, pages 5-20, National Bureau of Economic Research, Inc.
    12. Jin-Hyuk Kim & Liad Wagman, 2015. "Screening incentives and privacy protection in financial markets: a theoretical and empirical analysis," RAND Journal of Economics, RAND Corporation, vol. 46(1), pages 1-22, March.
    13. Henning Finseraas & Marianne Røed & Pål Schøne, 2020. "Labour immigration and union strength," European Union Politics, , vol. 21(1), pages 3-23, March.
    14. Gachter, Simon & Fehr, Ernst, 1999. "Collective action as a social exchange," Journal of Economic Behavior & Organization, Elsevier, vol. 39(4), pages 341-369, July.
    15. Álvaro Bustos & Pablo Bravo-Hurtado & Antonio Aninat, 2020. "The (Other) Effects of Restricting Access to Higher Courts: The Case of Wrongful Terminations in Labor Contracts in Chile," Documentos de Trabajo 534, Instituto de Economia. Pontificia Universidad Católica de Chile..
    16. Idris Adjerid & Alessandro Acquisti & Rahul Telang & Rema Padman & Julia Adler-Milstein, 2016. "The Impact of Privacy Regulation and Technology Incentives: The Case of Health Information Exchanges," Management Science, INFORMS, vol. 62(4), pages 1042-1063, April.
    17. Budzinski, Oliver, 2016. "Aktuelle Herausforderungen der Wettbewerbspolitik durch Marktplätze im Internet," Ilmenau Economics Discussion Papers 103, Ilmenau University of Technology, Institute of Economics.
    18. Aghion, Philippe & Algan, Yann & Cahuc, Pierre, 2008. "Can Policy Influence Culture? Minimum Wage and the Quality of Labor Relations," CEPREMAP Working Papers (Docweb) 0801, CEPREMAP.
    19. Florian Hoffmann & Roman Inderst & Marco Ottaviani, 2013. "Hypertargeting, Limited Attention, and Privacy: Implications for Marketing and Campaigning," Working Papers 479, IGIER (Innocenzo Gasparini Institute for Economic Research), Bocconi University.
    20. Miettinen, Topi & Stenbacka, Rune, 2015. "Personalized pricing versus history-based pricing: implications for privacy policy," Information Economics and Policy, Elsevier, vol. 33(C), pages 56-68.

    More about this item

    Keywords

    ;
    ;
    ;
    ;

    JEL classification:

    • K24 - Law and Economics - - Regulation and Business Law - - - Cyber Law
    • K41 - Law and Economics - - Legal Procedure, the Legal System, and Illegal Behavior - - - Litigation Process
    • O30 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - General

    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:eee:poleco:v:67:y:2021:i:c:s0176268020301154. 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: Catherine Liu (email available below). General contact details of provider: http://www.elsevier.com/locate/inca/505544 .

    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.