Privacy Regulation and Market Structure

38 Pages Posted: 22 Dec 2010 Last revised: 18 Nov 2013

James David Campbell

Providence College

Avi Goldfarb

University of Toronto - Rotman School of Management

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS)

Multiple version iconThere are 2 versions of this paper

Date Written: August 15, 2013

Abstract

This paper models how regulatory attempts to protect the privacy of consumers' data affect the competitive structure of data-intensive industries. Our results suggest that the commonly used consent-based approach may disproportionately benefit firms that offer a larger scope of services. Therefore, though privacy regulation imposes costs on all firms, it is small firms and new firms that are most adversely affected. We then show that this negative effect will be particularly severe for goods where the price mechanism does not mediate the effect, such as the advertising-supported internet.

Keywords: privacy, antitrust, regulation

JEL Classification: L40, L51, K20

Suggested Citation

Campbell, James David and Goldfarb, Avi and Tucker, Catherine E., Privacy Regulation and Market Structure (August 15, 2013). Available at SSRN: https://ssrn.com/abstract=1729405 or http://dx.doi.org/10.2139/ssrn.1729405

James David Campbell

Providence College ( email )

United States

Avi Goldfarb (Contact Author)

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6
Canada
416-946-8604 (Phone)
416-978-5433 (Fax)

Catherine E. Tucker

Massachusetts Institute of Technology (MIT) - Management Science (MS) ( email )

100 Main St
E62-536
Cambridge, MA 02142
United States

HOME PAGE: http://cetucker.scripts.mit.edu

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