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Consumer Privacy and the Market for Customer Information

Author

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  • Curtis R. Taylor

    () (Duke University)

Abstract

I investigate consumer privacy and the market for customer information in electronic retailing. The value of customer information derives from the ability of Internet firms to identify individual consumers and charge them personalized prices. I study two settings, a confidential regime in which the sale of customer information is not possible, and a disclosure regime in which one firm may compile and sell a customer list to another firm that uses it to price discriminate. Welfare comparisons depend critically on whether consumers anticipate sale of the list and on demand elasticity.

Suggested Citation

  • 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.
  • Handle: RePEc:rje:randje:v:35:y:2004:4:p:631-650
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    More about this item

    Keywords

    Consumer Protection Search; Learning; Information and Knowledge Retail and Wholesale Trade; Warehousing; e-Commerce Consumer; Information; Retailing;

    JEL classification:

    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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