Economic Aspects of Personal Privacy

Abstract

The advent of low-cost technology for manipulating and communicating information has raised significant concerns about personal privacy. Privacy is a complex issue that can be treated from many perspectives; this chapter provides an overview of some of the economic issues surrounding it.

I first describe the role of privacy in economic transactions, in which consumers will rationally want certain kinds of information about themselves to be available to producers and will want other kinds of information to be secret. Then, I go on to consider how one might define property rights with respect to private information in ways that allow consumers to retain control over how information about them is used.