Online privacy and information disclosure by consumers

Arbeitspapier

I study the welfare and price implications of consumer privacy. A consumer discloses information to a multi-product seller, which learns about the consumer's preferences, sets prices, and makes product recommendations. While the consumer benefits from accurate product recommendations, the seller may use the information to price discriminate. I show that the seller prefers to commit to not using consumer information for pricing to encourage information disclosure. However, this commitment hurts the consumer, who could be better off by pre-committing to withhold some information. In contrast to single-product models, total surplus may be lower if the seller can base prices on information.

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• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Bank of Canada Staff Working Paper ; No. 2019-22

Classification and Topics

• Classification: Wirtschaft ; Asymmetric and Private Information; Mechanism Design ; Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
• Subject: Economic models

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Ichihashi, Shota
• Event: Veröffentlichung
• (who): Bank of Canada
• (where): Ottawa
• (when): 2019

Further information

• DOI: doi:10.34989/swp-2019-22
• Handle: http://hdl.handle.net/10419/210763