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Privacy Elasticity: A (Hopefully) Useful New Concept

Author

Listed:
  • Inbal Dekel
  • Rachel Cummings
  • Ori Heffetz
  • Katrina Ligett

Abstract

Privacy considerations and their effects on behavior are becoming increasingly important. Yet the extremes of full and no privacy are rarely an option. How much does behavior change with small changes in privacy? Dekel et al. (2023) introduce the concept of privacy elasticity, the responsiveness of economic variables to small changes in privacy protections. This concept combines elasticity—a key economic measure of responsiveness of one variable to changes in another—and differential privacy—a computer science theory emerging as the standard tool for protecting and quantifying privacy. Together, they create a measure of privacy elasticity that is portable and comparable across contexts. The applicability of this concept is demonstrated by reviewing how privacy elasticity can be estimated in a public-good lab experiment.

Suggested Citation

  • Inbal Dekel & Rachel Cummings & Ori Heffetz & Katrina Ligett, 2024. "Privacy Elasticity: A (Hopefully) Useful New Concept," NBER Working Papers 32903, National Bureau of Economic Research, Inc.
    • Handle: RePEc:nbr:nberwo:32903
    Note: PE
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    References listed on IDEAS

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    1. John M. Abowd & Ian M. Schmutte, 2019. "An Economic Analysis of Privacy Protection and Statistical Accuracy as Social Choices," American Economic Review, American Economic Association, vol. 109(1), pages 171-202, January.
    2. Ori Heffetz & Katrina Ligett, 2014. "Privacy and Data-Based Research," Journal of Economic Perspectives, American Economic Association, vol. 28(2), pages 75-98, Spring.
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D82 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Asymmetric and Private Information; Mechanism Design
    • Z00 - Other Special Topics - - General - - - General

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