Download full text
(external source)
Citation Suggestion
Please use the following Persistent Identifier (PID) to cite this document:
https://hdl.handle.net/10419/128622
Exports for your reference manager
Markets for leaked information
[working paper]
Corporate Editor
Wissenschaftszentrum Berlin für Sozialforschung gGmbH
Abstract We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting effect, allocating the information to ... view more
We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting effect, allocating the information to those types of third parties who harm the agent most. In equilibrium, this limits information transmission by the agent, but never fully deters it. We also consider agents who naively provide information to the market. Their presence renders traded information more valuable and, thus, harms sophisticated agents by increasing the third party's demand for information. Halfbaked regulatory interventions may hurt naive agents without helping sophisticated agents. Comparing monopoly and oligopoly markets, we find that oligopoly is often better for the agent: it requires a higher value of traded information and therefore has to grant the agent more privacy.... view less
Classification
National Economy
Free Keywords
markets for information; naivete; privacy
Document language
English
Publication Year
2016
City
Berlin
Page/Pages
38 p.
Series
Discussion Papers / Wissenschaftszentrum Berlin für Sozialforschung, Forschungsschwerpunkt Markt und Entscheidung, Abteilung Ökonomik des Wandels, SP II 2015-305r
Handle
https://hdl.handle.net/10419/128622
Status
Published Version; reviewed
Licence
Deposit Licence - No Redistribution, No Modifications