, Volume 4, Issue 3, pp 209-239
Date: 08 Aug 2006

Privacy, property rights and efficiency: The economics of privacy as secrecy

Rent the article at a discount

Rent now

* Final gross prices may vary according to local VAT.

Get Access

Abstract

There is a long history of governmental efforts to protect personal privacy and strong debates about the merits of such policies. A central element of privacy is the ability to control the dissemination of personally identifiable data to private parties. Posner, Stigler, and others have argued that privacy comes at the expense of allocative efficiency. Others have argued that privacy issues are readily resolved by proper allocation of property rights to control information. Our principal findings challenge both views. We find: (a) privacy can be efficient even when there is no “taste” for privacy per se, and (b) to be effective, a privacy policy may need to ban information transmission or use rather than simply assign individuals control rights to their personally identifiable data.

JEL classifications D60 · D82 · K00