Document Type
Discussion Paper
Publication Date
11-24-2025
CFDP Number
d2474
CFDP Pages
57
Journal of Economic Literature (JEL) Code(s)
D18, D82, D83, L12, L51
Abstract
We study how privacy regulation affects menu pricing by a monopolist platform that collects and monetizes personal data. Consumers differ in privacy valuation and sophistication: naive users ignore privacy losses, while sophisticated users internalize them. The platform designs prices and data collection options to screen users. Without regulation, privacy allocations are distorted and naive users are exploited. Regulation through privacy-protecting defaults can create a market for information by inducing payments for data; hard caps on data collection protect naive users but may restrict efficient data trade.
Recommended Citation
Bisceglia, Michele; Bonatti, Alessandro; and Morton, Fiona Scott, "Regulating Privacy Policies On Digital Platforms" (2025). Cowles Foundation Discussion Papers. 2896.
https://elischolar.library.yale.edu/cowles-discussion-paper-series/2896