Consumer Privacy and the Market for Customer Information

By Curtis R. Taylor. 2004

453 citations recorded by the source corpus.

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.

Subfields: Management Science and Operations Research, Marketing, Strategy and Management

View Paper: https://www.semanticscholar.org/paper/3f25584aff38afc92e7caf61b30c0272ff70ce87

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Citations in the corpus

Targeted Advertising and Advertising Avoidance (2011, background): “Consider the symmetric case: m(1) = m(2) = m, v(1) S = v 2 S = vS, and v 1 B = v(2) B = vB. An increase in information accuracy a raises consumer utility and firm profits. 33See Brynjolfsson, Hu, and Simester (2007) for a discussion and further references.”
Online advertising and privacy (2014, unknown): “Although reminiscent of results by Taylor (2004), Acquisti and Varian (2005), Hermalin and Katz (2006), Calzolari and Pavan (2006), the latter effect stems from a different logic.”
Conditioning Prices on Purchase History (2005, background): “Since so many transactions are now computer mediated, and these computers can easily be networked to data centers, sellers now have the ability to access databases of past purchases in real time.”
Dynamic Pricing and Learning: Historical Origins, Current Research, and New Directions (2013, unknown): “Taylor (2004) considers a model closely related to Loginova and Taylor (2008), but focuses on questions regarding consumer privacy and the value of customer information.”
The Economics of Personal Data and the Economics of Privacy (2010, background): “Taylor (2004) also finds that, in the presence of tracking technologies that allow merchants to infer consumers’ preferences (and then engage in price discrimination), whether or not the presence of privacy regulatory protection enhances consumer and aggregate welfare depends on the consumers’…”
The Economics of Privacy (2016, background): “Among them, Varian (1997) observes that the development of low-cost technologies for data manipulation generates new concerns for personal information processing. Varian (1997) nonetheless recognizes that consumers may suffer privacy costs when too little personal information about them is being sha”
The Effect of Online Privacy Information on Purchasing Behavior: An Experimental Study (2011, methodology): “…this trade depends on the relative strength of their Electronic copy available at: https://ssrn.com/abstract=3305347 22 privacy and price sensitivities (see also Acquisti and Varian, 2005; and Taylor, 2004, for privacy models with price discrimination): the interplay of pi and ci in Equation [1].”
What is Different About Online Advertising? (2014, background): “More recently, a number of theory papers (e.g., Hermalin and Katz 2006; Taylor 2004) have demonstrated in a variety of ways that price discrimination can lead to something like Akerlof’s (1970) lemons problem when firms can readily share information.”
Behavior-Based Price Discrimination and Customer Recognition (2007, methodology): “customized pricing. We discuss the work of Taylor (2004a) and Calzolari and Pavan”
Estimation of Treatment Effects from Combined Data: Identification versus Data Security (2015, unknown): “The network effect can be associated with the loss of competitive advantage of the owner of personal data, as discussed in Taylor (2004), Acquisti and Varian (2005), Calzolari and Pavan (2006).”
Privacy Regulation and Market Structure (2015, background): “Figure 6: Lemma 1”