Social Welfare Analysis under Different Levels of Consumers’ Privacy Regulation
| Autor: | Su-min Yu, Xu-dong Lin, Xiaoli Huang, Shuilin Liu, Hanyang Luo, Yulin Li |
|---|---|
| Rok vydání: | 2021 |
| Předmět: |
privacy regulation
HF5001-6182 business.industry Information sharing Information technology Social Welfare Information security Economic surplus General Business Management and Accounting Computer Science Applications Competition (economics) behavior-based price discrimination (BBPD) information sharing product-privacy preference social welfare Business Privacy law business Duopoly Industrial organization |
| Zdroj: | Journal of Theoretical and Applied Electronic Commerce Research; Volume 16; Issue 7; Pages: 2943-2964 Journal of Theoretical and Applied Electronic Commerce Research, Vol 16, Iss 161, Pp 2943-2964 (2021) |
| ISSN: | 0718-1876 |
| DOI: | 10.3390/jtaer16070161 |
| Popis: | With the rapid development of information technology, digital platforms can collect, utilize, and share large amounts of specific information of consumers. However, these behaviors may endanger information security, thus causing privacy concerns among consumers. Considering the information sharing among firms, this paper constructs a two-period duopoly price competition Hotelling model, and gives insight into the impact of three different levels of privacy regulations on industry profit, consumer surplus, and social welfare. The results show that strong privacy protection does not necessarily make consumers better off, and weak privacy protection does not necessarily hurt consumers. Information sharing among firms will lead to strong competitive effects, which will prompt firms to lower the price for new customers, thus damaging the profits of firms, and making consumers’ surplus higher. The level of social welfare under different privacy regulations depends on consumers’ product-privacy preference, and the cost of information coordination among firms. With the cost of information coordination among firms increasing, it is only in areas where consumers have greater privacy preferences that social welfare may be optimal under the weak regulation. |
| Databáze: | OpenAIRE |
| Externí odkaz: |
|