Using Data and Respecting Users

Abstract

As data becomes increasingly valuable, firms face financial pressures to capture that data and extract its value. Consumers, on the other hand, have reason to fear that such data might not be used in their best interests. How can a firm capture data, respect consumer privacy, and create value all at the same time? This article takes technical and legal approaches to offer three solutions that alter the reward to risk ratio from the consumer’s perspective. The first aligns incentives, the second saves masked data, and the third saves masked algorithms. Together, these three approaches offer a range of ways to deliver value from data analysis while protecting users and respecting their trust.

Keywords: Data Science, Big Data, Analytics, Privacy, GDPR

JEL Classification: D04, D18, D61, D8, D82, D86, C8, K10, L2, L5