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Competition, Privacy, and Multi-Homing

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  • Jean-Marc Zogheib

Abstract

Two digital firms compete in prices and information disclosure levels. A consumer signing up to one firm's service decides how much personal information to provide. We find that firms essentially trade-off between consumer valuations and disclosure levels to determine their business strategies when consumers single-home. Under multi-homing, business strategies are more complex to assess and may completely shift compared to single-homing. All things being equal, implementing a strict privacy regime with no data disclosure can be optimal under single-homing, while a soft privacy regime with data disclosure may be preferred under multi-homing.

Suggested Citation

  • Jean-Marc Zogheib, 2023. "Competition, Privacy, and Multi-Homing," EconomiX Working Papers 2023-34, University of Paris Nanterre, EconomiX.
    • Handle: RePEc:drm:wpaper:2023-34
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    File URL: https://economix.fr/pdf/dt/2023/WP_EcoX_2023-34.pdf
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    References listed on IDEAS

    as
    1. Stigler, George J., 1980. "An Introduction to Privacy in Economics and Politics," Working Papers 10, The University of Chicago Booth School of Business, George J. Stigler Center for the Study of the Economy and the State.
    2. Jin‐Hyuk Kim & Liad Wagman & Abraham L. Wickelgren, 2019. "The impact of access to consumer data on the competitive effects of horizontal mergers and exclusive dealing," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 28(3), pages 373-391, June.
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    More about this item

    Keywords

    competition; online privacy; information disclosure; multi-homing.;
    All these keywords.

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • D40 - Microeconomics - - Market Structure, Pricing, and Design - - - General
    • L21 - Industrial Organization - - Firm Objectives, Organization, and Behavior - - - Business Objectives of the Firm
    • L41 - Industrial Organization - - Antitrust Issues and Policies - - - Monopolization; Horizontal Anticompetitive Practices

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