Information Frictions and Heterogeneity in Valuations of Personal Data
61 Pages Posted: 2 Dec 2021 Last revised: 11 Sep 2023
Date Written: November 30, 2021
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. These participants with low valuations and high probability of revisions belong to groups that are traditionally associated with low levels of digital literacy. 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
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