Document de travail

Privacy Regulation and Quality Investment

Yassine Lefouili et Ying Lei Toh

Résumé

This paper analyzes how a privacy regulation restricting data disclosure affects quality investment by a monopoly service provider - who derives revenues solely from sharing user data with third parties - and social welfare. In our model, a user's gross utility from the service depends on its quality and the amount of information shared. We show that in a fully covered market, the regulation reduces quality investment but may still be socially desirable when quality and information are not strong complements. In a partially covered market, the regulation may raise quality and social welfare even when quality and information are highly complementary

Mots-clés

Privacy Regulation; Data Disclosure; Quality;

Codes JEL

  • D83: Search • Learning • Information and Knowledge • Communication • Belief
  • L15: Information and Product Quality • Standardization and Compatibility
  • L51: Economics of Regulation

Référence

Yassine Lefouili et Ying Lei Toh, « Privacy Regulation and Quality Investment », TSE Working Paper, n° 17-795, avril 2017, révision juillet 2019.

Voir aussi

Publié dans

TSE Working Paper, n° 17-795, avril 2017, révision juillet 2019