The Market for Data Privacy

55 Pages Posted: 23 Mar 2019 Last revised: 29 Mar 2021

See all articles by Tarun Ramadorai

Tarun Ramadorai

Imperial College London; Centre for Economic Policy Research (CEPR); European Corporate Governance Institute (ECGI)

Antoine Uettwiller

Imperial College Business School

Ansgar Walther

Imperial College London

Multiple version iconThere are 2 versions of this paper

Date Written: March 29, 2020

Abstract

We scrape a comprehensive set of US firms’ privacy policies, and study them alongside firms' web data extraction behaviour. We find considerable and systematic variation in privacy policies along multiple dimensions including ease of access, length, readability, and clarity, both within and between industries. Surprisingly, firms' data extraction is strongly and positively related to the length and complexity of their privacy policies. Firms with intermediate levels of technical sophistication have longer, more complex policies. A simple signalling model of firms engaging in data extraction in an economy with both myopic and sophisticated consumers helps to rationalize these findings.

Keywords: privacy, data markets, web tracking, third-party sharing

JEL Classification: D8, K2, L1

Suggested Citation

Ramadorai, Tarun and Uettwiller, Antoine and Walther, Ansgar, The Market for Data Privacy (March 29, 2020). Available at SSRN: https://ssrn.com/abstract=3352175 or http://dx.doi.org/10.2139/ssrn.3352175

Tarun Ramadorai

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

HOME PAGE: http://www.tarunramadorai.com

Centre for Economic Policy Research (CEPR) ( email )

London
United Kingdom

European Corporate Governance Institute (ECGI) ( email )

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

Antoine Uettwiller

Imperial College Business School ( email )

South Kensington Campus
Exhibition Road
London SW7 2AZ, SW7 2AZ
United Kingdom

Ansgar Walther (Contact Author)

Imperial College London ( email )

South Kensington Campus
Exhibition Road
London, Greater London SW7 2AZ
United Kingdom

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