Abstract
We study the effects of property rights over the use of data on market outcomes. To do so, we consider a model in which a monopolistic firm offers a service to a set of heterogeneous users. The use of the service generates valuable data, but data extraction entails a privacy cost for users. A trade-off emerges between under-processing and over-monetization of data. We show that both the firm and users prefer the users (the firm) to own the rights for low (high) values of data. We further discuss the robustness of our results when allowing more possible contracts for the data owner and show that the main trade-off is robust to these extensions.
Keywords
Ownership; Data; Imperfect Competition; Privacy;
JEL codes
- D82: Asymmetric and Private Information • Mechanism Design
- D83: Search • Learning • Information and Knowledge • Communication • Belief
- D86: Economics of Contract: Theory
- L12: Monopoly • Monopolization Strategies
- L19: Other
- L49: Other
Reference
Wilfried Sand-Zantman, and Anastasios Dosis, “The Ownership of Data”, TSE Working Paper, n. 19-1025, July 2019, revised September 2020.
See also
Published in
TSE Working Paper, n. 19-1025, July 2019, revised September 2020