Data Brokers Co-Opetition

Abstract

Data brokers share consumer data with rivals and, at the same time, compete with them for selling. We propose a “co-opetition” game of data brokers and characterise their optimal strategies. When data are “sub-additive” with the merged value net of the merging cost being lower than the sum of the values of individual datasets, data brokers are more likely to share their data and sell them jointly. When data are “super-additive”, with the merged value being greater than the sum of the individual datasets, competition emerges more often. Finally, data sharing is more likely when data brokers are more efficient at merging datasets than data buyers.

Keywords: data brokers, personal information, privacy, co-opetition

JEL Classification: D430, L130, L860, M310