| dc.description.abstract | The pace at which online platforms have become an integral part of our everyday
life is nothing short of impressive. Many of such platforms have experienced
high growth in recent years which highlights the economic value of data. Using a
simple economic model, we investigate the consequences of negative externalities
in the market for online services and their welfare implications. We find that
the consumers do not internalise the social cost of consumption, and hence the
social planner suggests a lower level of consumption than in the decentralised
market. Consequently, we investigate whether Pigouvian taxation can replicate
the planner solution. Despite this, there seems to be a dichotomy between
people’s privacy attitudes and their behaviour, which raises questions regarding
the efficiency in the market for such online services. Therefore, we investigate
whether ignorance among consumers’ privacy preferences can explain why they
fail to adequately address their privacy concerns, leading to a higher level
of consumption. Lastly, knowing the complexities of fixing this market, we
investigate an alternative solution that could possibly replicate the planner
solution without the need for intrusive government intervention. | en_US |
