Data Union and Regulation in a Data Economy

58 Pages Posted: 30 Jan 2023 Last revised: 19 May 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

University of Chicago

Multiple version iconThere are 3 versions of this paper

Date Written: January 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.

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Suggested Citation

Cong, Lin and Mayer, Simon, Data Union and Regulation in a Data Economy (January 2023). NBER Working Paper No. w30881, Available at SSRN: https://ssrn.com/abstract=4342382

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
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Simon Mayer

University of Chicago ( email )

1101 East 58th Street
Chicago, IL 60637
United States

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