Data Fiduciary in Order to Alleviate Principal-Agent Problems in the Artificial Big Data Age

46 Pages Posted: 7 Oct 2019

See all articles by Julia M. Puaschunder

Julia M. Puaschunder

Harvard University; New School for Social Research; Columbia University; Princeton University; George Washington University Center for International Business Education and Research; The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA)

Date Written: October 5, 2019

Abstract

The classic principal-agent problem in political science and economics describes agency dilemmas or problems when one person, the agent, is put in a situation to make decisions on behalf of another entity, the principal. A dilemma occurs in situations when individual profit maximization or principal and agent are pitted against each other. This so-called moral hazard is nowadays emerging in the artificial big data age, when big data reaping entities have to act on behalf of agents, who provide their data with trust in the principal’s integrity and responsible big data conduct. Yet to this day, no data fiduciary has been clearly described and established to protect the agent from misuse of data. This article introduces the agent’s predicament between utility derived from information sharing and dignity in privacy as well as hyper-hyperbolic discounting fallibilities to not clearly foresee what consequences information sharing can have over time and in groups. The principal’s predicament between secrecy and selling big data insights or using big data for manipulative purposes will be outlined. Finally, the article draws a clear distinction between manipulation and nudging in relation to the potential social class division of those who nudge and those who are nudged.

Keywords: Behavioral Economics, Behavioral Political Economy, Data Fiduciary, Democratisation of Information, Dignity Education, Exchange Value, Fiduciary Duty, Governance, Information Sharing, Preferences, Privacy, Reclaiming the Common Good of Knowledge

Suggested Citation

Puaschunder, Julia M., Data Fiduciary in Order to Alleviate Principal-Agent Problems in the Artificial Big Data Age (October 5, 2019). Available at SSRN: https://ssrn.com/abstract=3464968 or http://dx.doi.org/10.2139/ssrn.3464968

Julia M. Puaschunder (Contact Author)

Harvard University ( email )

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New School for Social Research ( email )

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Columbia University ( email )

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Princeton University ( email )

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The New School - Bernard Schwartz Center for Economic Policy Analysis (CEPA) ( email )

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