NSFSaTC-BSF: CORE: Small: The Utilitarian Implications of Privacy Protections

  • Gradwohl, Ronen (PD/PI)

Project: Research project

Project Details


Privacy has an intrinsic individual and societal benefit, but privacy-protecting regulation and technologies may cause harm by discouraging information-sharing. We propose to use formal game-theoretic models to study the utilitarian implications of privacy protections while accounting for the intrinsic benefit of privacy. We hope to identify properties of strategic interactions that determine whether the net effects of privacy protections are positive or negative. It has been argued in the past that privacy protections undermine information sharing, which typically leads to market failure and inefficiencies. However, such arguments have never accounted for individual gains in welfare due to the alleviation of privacy concerns. Our agenda is to better understand the interplay between possible gains in terms of privacy versus the initial claims on market failures. Instituting privacy protections has two effects: a direct effect reflected in greater intrinsic privacy, and an indirect effect arising from the privacy protections' impact on behavior and market outcomes. Our goals are to uncover the forces that determine the interplay of these direct and indirect effects. When do they coincide, leading to an overall welfare increase, and when do they collide, possibly leading to a net welfare decrease? We also propose to analyze situations where the use of privacy protections is optional, and hence amounts to a strategic choice of users, and the issue of whether or not their use is observable to others. Finally, we plan to apply these insights and examine two specific applications: advertising and information- sharing in online social networks.
Effective start/end date9/1/178/31/21


  • National Science Foundation (CNS-1718670)


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