Information Frictions and Heterogeneity in Valuations of Personal Data

67 Pages Posted: 2 Dec 2021 Last revised: 31 Mar 2024

See all articles by Avinash Collis

Avinash Collis

Carnegie Mellon University

Alex Moehring

Massachusetts Institute of Technology (MIT) - Sloan School of Management

Ananya Sen

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management

Date Written: November 30, 2021

Abstract

We investigate how consumer valuations of personal data are affected by real world information interventions. Proposals to compensate users for the information they disclose to online services have been advanced in both research and policy circles. These proposals may be hampered by information frictions that limit consumers' ability to assess the value of their own data. We use an incentive-compatible mechanism to capture consumers’ willingness to share their social media data for monetary compensation and estimate distributions of valuations of social media data, before and after an information treatment. We find evidence of significant dispersion and heterogeneity in valuations before the information intervention, with women, Black, and low income individuals reporting systematically lower valuations than other groups. In both samples, the provision of information leads to a reduction in dispersion in data valuations. The reduction takes the form of increasing valuations by low-valuation individuals---in which women, low income, and Black users are over-represented. The findings suggest that strategies aimed at increasing information availability in markets for personal data may affect consumer welfare gains from data markets.

Keywords: value of data, data dividends, privacy, experiment, information treatments

Suggested Citation

Collis, Avinash and Moehring, Alex and Sen, Ananya and Acquisti, Alessandro, Information Frictions and Heterogeneity in Valuations of Personal Data (November 30, 2021). Available at SSRN: https://ssrn.com/abstract=3974826 or http://dx.doi.org/10.2139/ssrn.3974826

Avinash Collis

Carnegie Mellon University ( email )

Pittsburgh, PA
United States

Alex Moehring

Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )

100 Main Street
E62-416
Cambridge, MA 02142
United States

Ananya Sen (Contact Author)

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

4800 Forbes Avenue
Pittsburgh, PA Pittsburgh 15213-3890
United States

Alessandro Acquisti

Carnegie Mellon University - H. John Heinz III School of Public Policy and Management ( email )

Pittsburgh, PA 15213-3890
United States
412-268-9853 (Phone)
412-268-5339 (Fax)

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