Too Much Data: Prices and Inefficiencies in Data Markets-Reference-Cited by-同舟云学术

Too Much Data: Prices and Inefficiencies in Data Markets

Published:2022-11-01 Issue:4 Volume:14 Page:218-256
ISSN:1945-7669
Container-title:American Economic Journal: Microeconomics
language:en
Short-container-title:American Economic Journal: Microeconomics

Author:

Acemoglu Daron¹,Makhdoumi Ali²,Malekian Azarakhsh³,Ozdaglar Asu⁴

Affiliation:

1. Department of Economics, Massachusetts Institute of Technology (email: )

2. Fuqua School of Business, Duke University (email: )

3. Rotman School of Management, University of Toronto (email: )

4. Department of Electrical Engineering and Computer Science, Massachusetts Institute of Technology (email: )

Abstract

When a user shares her data with online platforms, she reveals information about others. In such a setting, externalities depress the price of data because once a user's information is leaked by others, she has less reason to protect her data and privacy. These depressed prices lead to excessive data sharing. We characterize conditions under which shutting down data markets improves welfare. Platform competition does not redress the problem of excessively low data prices and too much data sharing and may further reduce welfare. We propose a scheme based on mediated data sharing that improves efficiency. (JEL D62, D83, H23, L51, L86, L88)

Publisher

American Economic Association

Subject

General Economics, Econometrics and Finance

Link

https://pubs.aeaweb.org/doi/pdf/10.1257/mic.20200200

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