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Consumer Control and Privacy Policies

Author

Listed:
  • S. Nageeb Ali
  • Greg Lewis
  • Shoshana Vasserman

Abstract

Firms use consumer data to price discriminate. In response, policymakers have pushed for consumers to have control over their data so that they choose what to share and with whom. We model consumer control and its effect on markets through the lens of voluntary disclosure: the consumer has characteristics that they can verifiably disclose to the market. The market in turn draws inferences in equilibrium. Using this framework, we identify when consumers benefit from price discrimination in monopolistic and competitive markets. We also show that this framework can resolve the privacy paradox and potentially offers new limits for price discrimination.

Suggested Citation

  • S. Nageeb Ali & Greg Lewis & Shoshana Vasserman, 2023. "Consumer Control and Privacy Policies," AEA Papers and Proceedings, American Economic Association, vol. 113, pages 204-209, May.
    • Handle: RePEc:aea:apandp:v:113:y:2023:p:204-09
    DOI: 10.1257/pandp.20231085
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    More about this item

    JEL classification:

    • C81 - Mathematical and Quantitative Methods - - Data Collection and Data Estimation Methodology; Computer Programs - - - Methodology for Collecting, Estimating, and Organizing Microeconomic Data; Data Access
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection
    • D42 - Microeconomics - - Market Structure, Pricing, and Design - - - Monopoly
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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