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Incentivizing Efficiency in Local Public Good Games and Applications to the Quantification of Personal Data in Networks

Author

Listed:
  • Michela Chessa

    (Université Côte d'Azur, France
    GREDEG CNRS)

  • Patrick Loiseau

    (Univ. Grenoble Alpes, CNRS, Inria, Grenoble INP, LIG
    Max Planck Institute for Software Systems (MPI-SWS))

Abstract

A well established principle arms that the privacy of individuals is respected whenever they are entitled to control the dissemination of their personal data and they are fairly compensated. From this perspective, quantifying the value of personal data is a crucial task in the Internet economics. This task is dicult, however, as the privacy attitude of the users is often characterized by a contradictory behavior, known as the privacy paradox, in which they declare to be sensitive to privacy losses but also often release large amounts of data to enjoy free services. In this paper, we model this trade-off as a local public good game and propose some quantifications of the users' personal data depending on their position in the social network, based on enhancing an efficient solution of the local public good model. In a first part, we present some non-cooperative approaches, based on an internalization of the local externalities. In a second part, we extend the model to a cooperative game and we apply some well-known solutions from cooperative game theory to suggest fair ways to compensate the users and to perform a network analysis.

Suggested Citation

  • Michela Chessa & Patrick Loiseau, 2018. "Incentivizing Efficiency in Local Public Good Games and Applications to the Quantification of Personal Data in Networks," GREDEG Working Papers 2018-02, Groupe de REcherche en Droit, Economie, Gestion (GREDEG CNRS), University of Nice Sophia Antipolis.
  • Handle: RePEc:gre:wpaper:2018-02
    as

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    File URL: http://www.gredeg.cnrs.fr/working-papers/GREDEG-WP-2018-02.pdf
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    References listed on IDEAS

    as
    1. Coralio Ballester & Antoni Calvó-Armengol & Yves Zenou, 2006. "Who's Who in Networks. Wanted: The Key Player," Econometrica, Econometric Society, vol. 74(5), pages 1403-1417, September.
    2. Alessandro ACQUISTI & Jens GROSSKLAGS, 2012. "An Online Survey Experiment on Ambiguity and Privacy," Communications & Strategies, IDATE, Com&Strat dept., vol. 1(88), pages 19-39, 4th quart.
    3. Jackson, Matthew O. & Wolinsky, Asher, 1996. "A Strategic Model of Social and Economic Networks," Journal of Economic Theory, Elsevier, vol. 71(1), pages 44-74, October.
    4. Yann Bramoull? & Rachel Kranton & Martin D'Amours, 2014. "Strategic Interaction and Networks," American Economic Review, American Economic Association, vol. 104(3), pages 898-930, March.
    5. Moulin, Herve, 1987. "Egalitarian-Equivalent Cost Sharing of a Public Good," Econometrica, Econometric Society, vol. 55(4), pages 963-976, July.
    6. Ozan Candogan & Kostas Bimpikis & Asuman Ozdaglar, 2012. "Optimal Pricing in Networks with Externalities," Operations Research, INFORMS, vol. 60(4), pages 883-905, August.
    7. Bloch, Francis & Quérou, Nicolas, 2013. "Pricing in social networks," Games and Economic Behavior, Elsevier, vol. 80(C), pages 243-261.
    8. CHAMPSAUR, Paul, 1975. "How to share the cost of a public good?," CORE Discussion Papers RP 268, Université catholique de Louvain, Center for Operations Research and Econometrics (CORE).
    9. Chander, Parkash, 1993. "Dynamic Procedures and Incentives in Public Good Economies," Econometrica, Econometric Society, vol. 61(6), pages 1341-1354, November.
    10. Alessandro Acquisti & Leslie K. John & George Loewenstein, 2013. "What Is Privacy Worth?," The Journal of Legal Studies, University of Chicago Press, vol. 42(2), pages 249-274.
    11. Bramoulle, Yann & Kranton, Rachel, 2007. "Public goods in networks," Journal of Economic Theory, Elsevier, vol. 135(1), pages 478-494, July.
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    More about this item

    Keywords

    Personal Data; Social Network; Local Public Good Game; Cooperative Game Theory; Core; Shapley value;

    JEL classification:

    • C71 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Cooperative Games
    • C72 - Mathematical and Quantitative Methods - - Game Theory and Bargaining Theory - - - Noncooperative Games
    • D62 - Microeconomics - - Welfare Economics - - - Externalities
    • D85 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Network Formation
    • H41 - Public Economics - - Publicly Provided Goods - - - Public Goods

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