Market for Information and Selling Mechanisms

43 Pages Posted: 5 Jun 2020

See all articles by David Bounie

David Bounie

Télécom Paris

Antoine Dubus

Université Libre de Bruxelles (ULB)

Patrick Waelbroeck

Télécom Paris

Multiple version iconThere are 2 versions of this paper

Date Written: 2020

Abstract

We investigate the strategies of a data intermediary selling consumer information to firms for price discrimination purpose. We analyze how the mechanism through which the data intermediary sells information influences how much consumer information she will collect and sell to firms, and how it impacts consumer surplus. We consider three selling mechanisms tailored to sell consumer information: take it or leave it, sequential bargaining, and auctions. We show that the more information the intermediary collects, the lower consumer surplus. Consumer information collection is minimized, and consumer surplus maximized under the take it or leave it mechanism, which is the least profitable mechanism for the intermediary. We discuss two regulatory tools – a data minimization principle and a price cap – that can be used by data protection agencies and competition authorities to limit consumer information collection, increase consumer surplus, and ensure a fair access to information to firms.

Keywords: market for information, competition, price discrimination, data collection, privacy, selling mechanisms

Suggested Citation

Bounie, David and Dubus, Antoine and Waelbroeck, Patrick, Market for Information and Selling Mechanisms (2020). CESifo Working Paper No. 8307, Available at SSRN: https://ssrn.com/abstract=3618830

David Bounie (Contact Author)

Télécom Paris ( email )

19 Place Marguerite Perey
Palaiseau, 91120
France

Antoine Dubus

Université Libre de Bruxelles (ULB) ( email )

CP 132 Av FD Roosevelt 50
Brussels, Brussels 1050
Belgium

Patrick Waelbroeck

Télécom Paris ( email )

19 Place Marguerite Perey
Palaiseau, 91120
France

Here is the Coronavirus
related research on SSRN

Paper statistics

Downloads
8
Abstract Views
41
PlumX Metrics