Online Privacy and Information Disclosure by Consumers
By Shota Ichihashi. The American Economic Review, 2020
184 citations recorded by the source corpus.
I study the welfare and price implications of consumer privacy. A consumer discloses information to a multiproduct seller, which learns about his preferences, sets prices, and makes product recommendations. Although the consumer benefits from accurate recommendations, the seller may use the information to price discriminate. I show that the seller prefers to commit to not use information for pricing in order to encourage information disclosure. However, this commitment hurts the consumer, who could be better off by precommitting to withhold some information. In contrast to single-product models, total surplus may be lower if the seller can base prices on information. (JEL D11, D83, L81, M31)
Subfields: Management Science and Operations Research, Safety Research
View Paper: https://www.semanticscholar.org/paper/6c7c88290652838d3c1f09238a2de54829d2f928
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In Management Science and Operations Research
In Safety Research
Citations in the corpus
- Markets for Information: An Introduction (2018, unknown): “…a consumer’s preferences may also be used in their favor, e.g., through the customization of product characteristics. de Cornière and de Nijs (2016), Hidir and Vellodi (2018), and Ichihashi (2018) analyze different aspects of the tradeoff between content personalization and price discrimination.”
- Open Banking: Credit Market Competition When Borrowers Own the Data (2020, background): “…include Milgrom andWeber (1982) and Engelbrecht-Wiggans, Milgrom, and Weber (1983); later papers such as Hausch (1987), Kagel and Levin (1999), and Banerjee (2005) explore information structures that allow each bidder to have some private information (which is the information structure adopted in…”
- Privacy as a Public Good: A Case for Electronic Cash (2019, unknown): “Another example is the situation where additional information about consumers allows producers to help consumers make better choices (Ichihashi, 2019), although it is not guaranteed that consumers benefit from revealing information in such a situation (Board and Lu, 2018).”