Show simple item record Taylor, Curtis en_US Wagman, Liad en_US 2010-03-09T15:41:15Z 2010-03-09T15:41:15Z 2008 en_US
dc.description.abstract When firms can identify their past customers, they may use information about purchase histories in order to price discriminate. We present a model with a monopolist and a continuum of heterogeneous consumers, where consumers can opt out from being identified, possibly at a cost. We find that when consumers can costlessly opt out, they all individually choose privacy, which results in the highest profit for the monopolist. In fact, all consumers are better off when opting out is costly. When valuations are uniformly distributed, social surplus is non-monotonic in the cost of opting out and is highest when opting out is prohibitively costly. We introduce the notion of a privacy gatekeeper - a third party that is able to act as a privacy conduit and set the cost of opting out. We prove that the privacy gatekeeper only charges the firm in equilibrium, making privacy costless to consumers. en_US
dc.format.extent 242711 bytes
dc.format.mimetype application/pdf
dc.language.iso en_US
dc.publisher SSRN en_US
dc.subject Anonymity en_US
dc.subject E-commerce en_US
dc.subject Opt out en_US
dc.subject Privacy en_US
dc.subject price discrimination en_US
dc.title Who Benefits from Online Privacy? en_US
dc.type Journal Article en_US
dc.department Economics

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