Working Paper: NBER ID: w30215
Authors: Inbal Dekel; Rachel Cummings; Ori Heffetz; Katrina Ligett
Abstract: We propose and initiate the study of privacy elasticity—the responsiveness of economic variables to small changes in the level of privacy given to participants in an economic system. Individuals rarely experience either full privacy or a complete lack of privacy; we use differential privacy—a computer-science theory increasingly adopted by industry and government—as a standardized means of quantifying continuous privacy changes. The resulting privacy measure implies a privacy-elasticity notion that is portable and comparable across contexts. We discuss applications, and demonstrate the feasibility of this approach by estimating the privacy elasticity of public-good contributions in a lab experiment.
Keywords: Privacy Elasticity; Differential Privacy; Economic Behavior; Public Goods
JEL Codes: C91; D82; Z00
Edges that are evidenced by causal inference methods are in orange, and the rest are in light blue.
| Cause | Effect |
|---|---|
| privacy loss (K24) | public good contributions (H41) |
| differential privacy parameter (C46) | behavioral outcomes (D91) |
| privacy levels (K24) | economic behavior (D22) |
| privacy elasticity (K24) | public good contributions (H41) |