Author(s)
Curtis Taylor and Liad Wagman
Source
NET Institute Working Paper #08-26
Summary
This paper addresses the ability of firms to track individual purchasing and use this information to price discriminate.
Policy Relevance
This paper addresses important Internet privacy issues.
Main Points
- Behavior-based advertising and price discrimination are ubiquitous in electronic commerce. This paper addresses the need to analyze these practices so policy makers can understand the regulatory instruments at their disposal.
- Presently, privacy practices in electronic commerce are dictated largely by voluntary compliance with industry standards and recommendations by regulatory agencies.
- When consumers can opt out without cost, they all individually choose privacy, which paradoxically results in the highest profit for the monopolist.
