Data Union and Regulation in a Data Economy

57 Pages Posted: 20 Oct 2022 Last revised: 19 Dec 2023

See all articles by Lin William Cong

Lin William Cong

Cornell University - Samuel Curtis Johnson Graduate School of Management; National Bureau of Economic Research (NBER)

Simon Mayer

Carnegie Mellon University

Multiple version iconThere are 3 versions of this paper

Date Written: November 16, 2023

Abstract

In a model of data-driven firm competition, data are jointly produced by users, buying firms’ services and contributing data, and firms, investing in data infrastructure and collection. Data collection improves services, benefiting users, but may reduce competition, harming users. Dispersed users do not internalize the impact of their data contribution on (i) service quality, (ii) competition, and (iii)
firms’ investment incentives, causing inefficient data over- or underinvestment. Unlike data sharing, user privacy protection policies, or data markets, a data union — which coordinates users’ data contributions — or data trust — which intermediates data sales — can address these inefficiencies.

Keywords: Data Sharing, Data Trust, Digital Economy, GDPR, Network Effect, Open Banking, Privacy

JEL Classification: L10, L41, L50, O30

Suggested Citation

Cong, Lin and Mayer, Simon, Data Union and Regulation in a Data Economy (November 16, 2023). Available at SSRN: https://ssrn.com/abstract=4249183 or http://dx.doi.org/10.2139/ssrn.4249183

Lin Cong (Contact Author)

Cornell University - Samuel Curtis Johnson Graduate School of Management ( email )

Ithaca, NY 14853
United States

HOME PAGE: http://www.linwilliamcong.com/

National Bureau of Economic Research (NBER) ( email )

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Simon Mayer

Carnegie Mellon University ( email )

Pittsburgh, PA 15213-3890
United States

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