The market for consumers' personal and preference information is growing as a result of both advances in information-acquisition technologies and increasing strategic importance of this information. Through a formal economic model of consumers' personalization-for-privacy (p4p) tradeoff, we...

We study price discrimination by a monopoly two-sided platform who mediates interactions between two different groups of agents. We adapt a canonical model of second degree price discrimination a la Mussa and Rosen (1978) to a two-sided platform by focusing on non-responsiveness, a clash between...

This article introduces a transaction cost economic framework for interpreting the roles consumers play in social networking services (“SNSs”). It explains why the exchange between consumers and SNSs is not simple and discrete, but rather a continuous transaction with atypical attributes....

In consumer-to-consumer online platforms that enable selling (e.g., eBay, Taobao) or sharing (e.g., Airbnb, Uber) of goods and services, information asymmetry between providers (e.g., sellers, hosts, drivers) and consumers (e.g., buyers, guests, passengers) pose challenges. Such platforms...

Trust is particularly important in online markets to facilitate the transfer of sensitive consumer information to online retailers. In electronic markets, various proposals have been made to facilitate these information transfers. We develop analytic models of hidden information to analyze the...

Digital platforms, empowered by artificial intelligence algorithms, facilitate efficient interactions between consumers and merchants that allow the collection of profiling information which drives innovation and welfare. Private incentives, however, lead to information asymmetries resulting in...

Lenders can exploit households' payment data to infer their creditworthiness. When households value privacy, they then face a tradeoff between protecting such privacy and credit conditions. We study how the introduction of an informationally more intrusive digital payment vehicle affects...

We study commercialization of personal data through personalized advertising by a content platform. Content consumption generates productive data about consumer preferences. The firm invests in artificial intelligence (AI) to improve analytical power and in quality to stimulate content...

We study a model of financial intermediation, payment choice, and privacy in the digital economy. Cash preserves anonymity but cannot be used for more efficient online transactions. By contrast, bank deposits can be used online but do not preserve anonymity. Banks use the information contained...

This article examines the privacy consequences of the diffusion of smart grid and smart metering technologies. It illustrates how high resolution electricity usage information can be used to reconstruct many intimate details of a consumer's daily life, and provides examples of how that...