{"title":"Privacy regulation in asymmetric environments","authors":"Shuaicheng Liu","doi":"10.1007/s11149-024-09478-1","DOIUrl":null,"url":null,"abstract":"<p>Around the world, strict privacy regulations are gradually being implemented, with the intended purpose of facilitating consumers to protect their privacy. This paper analyzes the unintended consequences of privacy regulations in the context of asymmetric data advantage. To this end, this paper constructs a model of behavior-based price discrimination, where one firm (such as the incumbent) possesses more data than the other (such as the entrant). The results demonstrate that stricter privacy regulation always benefits the data-advantaged firm. However, it has negative implications for both the data-disadvantaged firm and consumers in most cases. Furthermore, strict regulation leads to weakened competition and intensified mismatching. Therefore, this paper suggests a lenient regulatory policy.</p>","PeriodicalId":47149,"journal":{"name":"Journal of Regulatory Economics","volume":"154 1","pages":""},"PeriodicalIF":1.4000,"publicationDate":"2024-05-08","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":"0","resultStr":null,"platform":"Semanticscholar","paperid":null,"PeriodicalName":"Journal of Regulatory Economics","FirstCategoryId":"96","ListUrlMain":"https://doi.org/10.1007/s11149-024-09478-1","RegionNum":4,"RegionCategory":"经济学","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":null,"EPubDate":"","PubModel":"","JCR":"Q3","JCRName":"ECONOMICS","Score":null,"Total":0}
引用次数: 0
Abstract
Around the world, strict privacy regulations are gradually being implemented, with the intended purpose of facilitating consumers to protect their privacy. This paper analyzes the unintended consequences of privacy regulations in the context of asymmetric data advantage. To this end, this paper constructs a model of behavior-based price discrimination, where one firm (such as the incumbent) possesses more data than the other (such as the entrant). The results demonstrate that stricter privacy regulation always benefits the data-advantaged firm. However, it has negative implications for both the data-disadvantaged firm and consumers in most cases. Furthermore, strict regulation leads to weakened competition and intensified mismatching. Therefore, this paper suggests a lenient regulatory policy.
期刊介绍：
Recent legislative and policy reforms have changed the nature of regulation. Partial deregulation has created a new dimension to regulatory problems, as the debate is extended to include diversification and new forms of regulation. The introduction of incentive-based rate schedules and ratemaking procedures, the integration of demand-side programs with planning for capitol expansion, and other developments, raise a host of theoretical and empirical questions. The Journal of Regulatory Economics serves as a high quality forum for the analysis of regulatory theories and institutions by developing the rigorous economics foundations of regulation. Both theoretical and applied works, including experimental research, are encouraged. Research in all aspects of regulation is of interest including traditional problems of natural monopoly, antitrust and competition policy, incentive regulation, deregulation, auction theory, new policy instruments, health and safety regulation, environmental regulation, insurance and financial regulation, hazardous and solid waste regulation, universal service obligation, and consumer product regulation. The JRE provides researchers, policy-makers, and institutions with current perspectives on the theory and practice of economics of regulation. While there are a number of journals and magazines that include the study of regulation, the JRE is unique in that it fills a gap in the market for a high quality journal dealing solely with the economics of regulation.Officially cited as: J Regul Econ
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