A Market for Unbiased Private Data: Paying Individuals According to Their Privacy Attitudes
17 Pages Posted: 28 Apr 2012
Date Written: April 26, 2012
Since there is, in principle, no reason why third parties should not pay individuals for the use of their data, we introduce a realistic market that would allow these payments to be made while taking into account the privacy attitude of the participants. And since it is usually important to use unbiased samples to obtain credible statistical results, we examine the properties that such a market should have and suggest a mechanism that compensates those individuals that participate according to their risk attitudes. Equally important, we show that this mechanism also benefits buyers, as they pay less for the data than they would if they compensated all individuals with the same maximum fee that the most concerned ones expect.
Keywords: privacy, markets for data
JEL Classification: C88, D82
Suggested Citation: Suggested Citation