Please use this identifier to cite or link to this item: http://hdl.handle.net/10419/185737
Authors: 
Dimakopoulos, Philipp
Sudaric, Slobodan
Year of Publication: 
2018
Series/Report no.: 
Discussion Paper No. 67
Abstract: 
We analyze platform competition where user data is collected to improve adtargeting. Considering that users incur privacy costs, we show that the equilibrium level of data provision is distorted and can be inefficiently high or low: if overall competition is weak or if targeting benefits are low, too much private data is collected, and vice-versa. Further, we find that softer competition on either market side leads to more data collection, which implies substitutability between competition policy measures on both market sides. Moreover, if platforms engage in two-sided pricing, data provision is efficient.
Subjects: 
ad targeting
platform competition
privacy
user data
JEL: 
D43
L13
L40
L86
Document Type: 
Working Paper

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