Economics research seminar: Zhijun Chen, Monash University

Research topic: Paying Consumers for Their Data

Zhijun Chen, University of Technology Sydney 

Topic

Paying Consumers for Their Data

abstract

Digital firms offer digital products to consumers and collect consumer data as a by-product of their usage. This data acquisition generates both data-monetization revenue and data-driven consumer benefits, while imposing privacy costs on consumers. The paper explores compensation schemes for consumer data, focusing on the interdependence between data collection and digital product provision, and examining the role of cross-subsidization in compensation mechanisms. We analyze the optimal compensation scheme for a monopolistic digital firm, examine the impact of data acquisition on competition, and investigate personalized pricing in the context of consumer privacy choices. Our findings offer valuable policy implications for digital privacy regulations and competition policies related to data collection.

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