Working Paper: CEPR ID: DP16901
Authors: Florian Hoffmann; Roman Inderst; Marco Ottaviani
Abstract: This paper characterizes equilibrium persuasion through selective disclosure based on the personal information that senders acquire about the preferences and orientations of receivers, with applications to strategic marketing and campaigning. We derive positive and normative implications depending on: the extent of competition among senders, whether receivers are wary of senders collecting personalized data, and whether firms are able to personalize prices. Privacy laws requiring senders to obtain consent to acquire information are beneficial when there is little or asymmetric competition among senders, when receivers are unwary, and when firms caprice discriminate. Otherwise, policy intervention has unintended negative welfare consequences.
Keywords: selective disclosure; hypertargeting; limited attention; privacy regulation
JEL Codes: D83; M31
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Selective disclosure (G14) | receivers' expected utility (D81) |
| Selective disclosure (G14) | improved decision-making outcomes for receivers (D91) |
| Low competition among senders (L87) | receivers benefit from selective disclosure (G14) |
| Privacy regulation requiring consent for data collection (D18) | beneficial when competition is low and receivers are unwary (G14) |
| Privacy regulation (D18) | potential harm to receivers' welfare (I30) |
| Regulatory frameworks (G38) | varied welfare outcomes for consumers (P46) |
| Sender strategies + receiver awareness (D82) | outcomes depend on interaction (O36) |