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Consumer Consent Regulation

Author

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  • Roland Strausz

Abstract

Consumer consent regulation is the cornerstone of modern data privacy regulation such as the European GDPR and the Californian CCPA. By ensuring that consumers can reject any harmful data collection, the regulation seems an effective tool for protecting consumers against price discrimination. By contrast, I provide the insight that consent regulation alone is ineffective because it provides firms with the loophole to commit to unattractive offers to dissenting consumers. Effective consent regulation therefore requires an explicit regulation of the firm's dissent offer. This is informationally demanding; regulation that merely insists on ``reasonable'' (sequential rational) offers is ineffective.

Suggested Citation

  • Roland Strausz, 2024. "Consumer Consent Regulation," Berlin School of Economics Discussion Papers 0053, Berlin School of Economics.
    • Handle: RePEc:bdp:dpaper:0053
    DOI: 10.48462/opus4-5654
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    References listed on IDEAS

    as
    1. Susan Athey & Christian Catalini & Catherine Tucker, 2017. "The Digital Privacy Paradox: Small Money, Small Costs, Small Talk," NBER Working Papers 23488, National Bureau of Economic Research, Inc.
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    4. Beresford, Alastair R. & Kübler, Dorothea & Preibusch, Sören, 2012. "Unwillingness to pay for privacy: A field experiment," Economics Letters, Elsevier, vol. 117(1), pages 25-27.
    5. Grossman, Sanford J, 1981. "The Informational Role of Warranties and Private Disclosure about Product Quality," Journal of Law and Economics, University of Chicago Press, vol. 24(3), pages 461-483, December.
    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    privacy regulation; data collection; price discrimination;
    All these keywords.

    JEL classification:

    • L51 - Industrial Organization - - Regulation and Industrial Policy - - - Economics of Regulation
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design

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