Markets for leaked information

Arbeitspapier

We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting effect, allocating the information to those types of third parties who harm the agent most. In equilibrium, this limits information transmission by the agent, but never fully deters it. We also consider agents who naively provide information to the market. Their presence renders traded information more valuable and, thus, harms sophisticated agents by increasing the third party's demand for information. Halfbaked regulatory interventions may hurt naive agents without helping sophisticated agents. Comparing monopoly and oligopoly markets, we find that oligopoly is often better for the agent: it requires a higher value of traded information and therefore has to grant the agent more privacy.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: WZB Discussion Paper ; No. SP II 2015-305r

Classification and Topics

• Classification: Wirtschaft ; Noncooperative Games ; Consumer Economics: Theory ; Consumer Protection ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
• Subject: privacy ; markets for information ; naivete

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Huck, Steffen ; Weizsäcker, Georg
• Event: Veröffentlichung
• (who): Wissenschaftszentrum Berlin für Sozialforschung (WZB)
• (where): Berlin
• (when): 2016

Further information

• Handle: http://hdl.handle.net/10419/128622
• Last update: 10.03.2025, 11:42 AM CET