Conditional Privacy Rights
Journal of Institutional and Theoretical Economics, Forthcoming
17 Pages Posted: 14 Jun 2016 Last revised: 26 Oct 2016
Date Written: June 12, 2016
People have subjective valuations of privacy. Thus, absent further considerations, efficiency requires that a person be afforded privacy if, and only if, his subjective valuation of privacy exceeds the social value of the information that would be disclosed through a violation of that person's privacy. Absolute regimes that either always allow privacy, or never allow privacy, cannot achieve this result. This article shows that a conditional privacy regime can lead to efficient separation among people based on their subjective valuations of privacy. Moreover, this regime need not inefficiently distort information collection incentives or incentives to refrain from various acts that may generate collectible information.
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