Pricing Private Data
34 Pages Posted: 16 Sep 2012 Last revised: 18 Nov 2012
Date Written: September 14, 2012
We consider a market where buyers can access unbiased samples of private data by appropriately compensating the individuals to whom the data corresponds (the sellers) according to their privacy attitudes. We show how bundling the buyers' demand can decrease the price that buyers have to pay per data point, while ensuring that sellers are willing to participate. Our approach leverages the inherently randomized nature of sampling, along with the risk-averse attitude of sellers in order to discover the minimum price at which buyers can obtain unbiased samples. We take a prior-free approach and introduce a mechanism that incentivizes each individual to truthfully report his preferences in terms of different payment schemes. We then show that our mechanism provides optimal price guarantees in several settings.
Keywords: private data, big data, ecommerce
JEL Classification: D49, C88, D82
Suggested Citation: Suggested Citation