Request For Research Presentations For the PrivacyCon Conference
Abstract: It has been argued that the economic study of privacy must be fragmented across the many economic contexts which use personal information. This paper argues that contextually fragmented economics of personal information will not capture the most pressing privacy problem, which is the unpredictable secondary use of personal information in contexts that it was not originally collected in. The statistical properties of information flow in causal systems imply that the range of potential secondary uses will be unknown to consumers. This information assymetry due to the empirical complexity of understanding the consequencs of personal information disclosure suggests the conditions of market failure. Two-sided markets are identified as a way for firms to capitalize on the multiple purposes of personal data by renting out associational information through advertising services. As a solution to the implied market failure, we consider data protection regulation similar to that already in place in other expert service sectors (e.g. health, finance, and education). N.B. A formalization of this framework based on Multi-Agent Influence Diagrams (Koller and Milch, 2003) is in the works. This is a draft.