KDI 한국개발연구원 - 경제정책정보 - 발간처별 목록 - 은행 - Bank of Canada - Online Privacy and Information Disclosure by Consumers



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Online Privacy and Information Disclosure by Consumers

Bank of Canada 2019.07.11
I study the welfare and price implications of consumer privacy. A consumer discloses information to a multi-product seller, which learns about the consumer’s preferences, sets prices, and makes product recommendations. While the consumer benefits from accurate product recommendations, the seller may use the information to price discriminate. I show that the seller prefers to commit to not using consumer information for pricing to encourage information disclosure. However, this commitment hurts the consumer, who could be better off by pre-committing to withhold some information. In contrast to single-product models, total surplus may be lower if the seller can base prices on information.

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