Arbeitspapier

Online privacy and market structure: Theory and evidence

This paper investigates how privacy regulation affects the structure of online markets. We provide a simple theoretical model capturing the basic trade-off between the degree of privacy intrusion and the informativeness of advertising. We derive empirically testable hypotheses regarding a possibly asymmetric effect of privacy regulation on large and small firms using a diff-diff-diff model with heterogeneous treatment timing. Our theoretical model predicts that privacy regulation may affect predominantly large firms, even if - as our data confirms - these large firms tend to offer more privacy. Our empirical results show that, if any, only large firms were negatively affected, suggesting that privacy regulation might boost competition by leveling out the playing field for small firms.

ISBN
978-3-86304-307-0
Language
Englisch

Bibliographic citation
Series: DICE Discussion Paper ; No. 308

Classification
Wirtschaft
Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
Information and Internet Services; Computer Software
Advertising
Marketing and Advertising: Government Policy and Regulation
Subject
Privacy
Competition
Regulation
ePrivacy Directive

Event
Geistige Schöpfung
(who)
Sabatino, Lorien
Sapi, Geza
Event
Veröffentlichung
(who)
Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)
(where)
Düsseldorf
(when)
2019

Handle
Last update
10.03.2025, 11:42 AM CET

Data provider

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Object type

  • Arbeitspapier

Associated

  • Sabatino, Lorien
  • Sapi, Geza
  • Heinrich Heine University Düsseldorf, Düsseldorf Institute for Competition Economics (DICE)

Time of origin

  • 2019

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