The Ownership of Data
29 Pages Posted: 17 Jul 2019
Date Written: July 16, 2019
We study the effects of property rights over the use of data on market outcomes. For this, we consider a model in which a monopolistic firm offers a service to a set of heterogeneous users. Usage generates valuable data but data extraction entails a privacy cost to users. We show that both the firm and users prefer the users (the firm) to own the rights for low (high) values of data. We further discuss the robustness of our results by allowing more contracting possibilities to the data owner. We show that the main trade-off between the two ownership regimes is robust to these extensions.
Keywords: Ownership, Data, Imperfect Competition, Privacy
JEL Classification: D82, D83, D86, L12, L19, L49
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