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“For the public benefit”: who should control our data?

Author

Listed:
  • Sarit Markovich

    (Kellogg School of Management, Northwestern University, Evanston, IL, USA)

  • Yaron Yehezkel

    (Coller School of Management, Tel-Aviv University, Ramat-Aviv, Israel)

Abstract

We consider a platform that collects data from users. Data has commercial benefit to the platform, personal benefit to the user, and public benefit to other users. We ask whether the platform, or users, should have the right to decide which data the platform commercializes. We find that when users differ in their disutility from the commercialization of their data and the public benefit of data is high (low), it is welfare enhancing to let the platform (users) control the data. In contrast, when heterogeneity is in the disutility from the commercialization of different data items, it is welfare enhancing to let users (the platform) control the data when the public benefit of data is high (low). Furthermore, we find that allowing the platform to compensate users for their data is not always welfare enhancing and competition does not necessarily result in the efficient outcome.

Suggested Citation

  • Sarit Markovich & Yaron Yehezkel, 2021. "“For the public benefit”: who should control our data?," Working Papers 21-08, NET Institute.
    • Handle: RePEc:net:wpaper:2108
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    File URL: http://www.netinst.org/Markovich_21-08.pdf
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    References listed on IDEAS

    as
    1. Jullien, Bruno & Lefouili, Yassine & Riordan, Michael, 2018. "Privacy Protection, Security, and Consumer Retention," TSE Working Papers 18-947, Toulouse School of Economics (TSE), revised Jun 2020.
    2. Caillaud, Bernard & Jullien, Bruno, 2003. "Chicken & Egg: Competition among Intermediation Service Providers," RAND Journal of Economics, The RAND Corporation, vol. 34(2), pages 309-328, Summer.
    3. Choi, Jay Pil & Jeon, Doh-Shin & Kim, Byung-Cheol, 2019. "Privacy and personal data collection with information externalities," Journal of Public Economics, Elsevier, vol. 173(C), pages 113-124.
    4. Loertscher, Simon & Marx, Leslie M., 2020. "Digital monopolies: Privacy protection or price regulation?," International Journal of Industrial Organization, Elsevier, vol. 71(C).
    5. Anastasios Dosis & Wilfried Sand-Zantman, 2023. "The Ownership of Data," The Journal of Law, Economics, and Organization, Oxford University Press, vol. 39(3), pages 615-641.
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    Cited by:

    1. Justin P. Johnson & Thomas Jungbauer & Marcel Preuss, 2024. "Online Advertising, Data Sharing, and Consumer Control," Management Science, INFORMS, vol. 70(11), pages 7984-8002, November.
    2. Tesary Lin & Avner Strulov-Shlain, 2023. "Choice Architecture, Privacy Valuations, and Selection Bias in Consumer Data," Papers 2308.13496, arXiv.org.
    3. Itay P. Fainmesser & Andrea Galeotti & Ruslan Momot, 2023. "Digital Privacy," Management Science, INFORMS, vol. 69(6), pages 3157-3173, June.

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    JEL classification:

    • L1 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance

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