Abstract
Markets can “fail” for a variety of reasons and the result is that either “too much” or “too little” of a good is produced. Implicit in the proposals to regulate the market for personal information is the view that there is a failure in the market for personal information resulting in “too much” information being produced, disseminated and used. Economic welfare would be improved if market failures were corrected and the “right” amount of goods produced.
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References
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This is in contrast to problems like identity theft, where there are real victims, as a recent Wall Street Journal article indicates: “Unlike with most privacy legislation, sponsors of identity-theft bills could make their cases with real examples of wrecked credit ratings and ruined finances. State Sen. Margarita Prentice, a Seattle Democrat who sponsored the Washington bill, says much of the commercial privacy debate — focusing on such issues as whether consumers are harmed when their shopping habits are tracked — is ‘too theoretical.’ But with identity theft, she says, ‘there are genuine victims.’” Robert Gavin, “Lawmakers Crack Down on Identity-Theft Issues,” The Wall Street Journal, May 16, 2001.
Business Week, April 5, 1999, “Privacy: The Internet Wants Your Personal Info. What’s In It For You?” In a story one year later, Business Week still advocated privacy regulation, but still had no evidence — even anecdotal — for its position: “It’s Time for Rules in Wonderland,” March 20, 2000.
Jeffrey Rosen, “The Eroded Self,” New York Times Magazine, April 30, 2000, p. 46.
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Rubin, P.H., Lenard, T.M. (2002). Market Failure and Consumer Harm. In: Privacy and the Commercial Use of Personal Information. Springer, Boston, MA. https://doi.org/10.1007/978-1-4615-1719-1_3
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DOI: https://doi.org/10.1007/978-1-4615-1719-1_3
Publisher Name: Springer, Boston, MA
Print ISBN: 978-1-4613-5694-3
Online ISBN: 978-1-4615-1719-1
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