Working Paper: NBER ID: w19526
Authors: Catherine L. Mann
Abstract: Vast amounts of information result from business and consumer search, communication, and transactions. All this information can enhance market efficiency and consumer surplus as firms tailor products to buyers. But, there is increased risk of information loss. What issues should be on the Digital Agenda with regard to information loss, and what data are available to inform and generate incentives for consumer, business, and policy interactions in the information marketplace? This paper reviews the situation and points out where we need more thought and more data. Topics include: (1) Frameworks for analysis: How should we model the information marketplace, particularly with regard to the benefits and costs of information aggregation and protection? (2) Quantification and data: What is the evidence on the prevalence and nature of information loss, and what are the costs of information loss, and to whom? (3) Market and Policy Response: What do we know about the efficacy of market vs. other approaches to incentivize market participants to avoid loss or remediate after information loss? Throughout, of particular interest is the international dimension of the information marketplace. What issues arise when countries differ in their attitudes and policies toward the information marketplace?
Keywords: No keywords provided
JEL Codes: F29; F5; L19; L86
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| Increased data breaches (K24) | Significant costs for consumers and businesses (F69) |
| Increased access to consumer data (D16) | Increased probability of information loss (D89) |
| Increased probability of information loss (D89) | Negative effects on market efficiency (G14) |
| Insufficient market responses to data breach disclosure (D18) | Need for policy intervention (O25) |
| Lack of consistent approach to data breach disclosure (K24) | Narrow understanding of costs and benefits of information loss (D89) |