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Pareto-Improving Data-Sharing

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  • Ronen Gradwohl
  • Moshe Tennenholtz

Abstract

We study the effects of data sharing between firms on prices, profits, and consumer welfare. Although indiscriminate sharing of consumer data decreases firm profits due to the subsequent increase in competition, selective sharing can be beneficial. We show that there are data-sharing mechanisms that are strictly Pareto-improving, simultaneously increasing firm profits and consumer welfare. Within the class of Pareto-improving mechanisms, we identify one that maximizes firm profits and one that maximizes consumer welfare.

Suggested Citation

  • Ronen Gradwohl & Moshe Tennenholtz, 2022. "Pareto-Improving Data-Sharing," Papers 2205.11295, arXiv.org.
    • Handle: RePEc:arx:papers:2205.11295
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    References listed on IDEAS

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