File Download
Supplementary

Others: Resolving the personalization-privacy dilemma: theory and implications of a privacy-preserving contract

TitleResolving the personalization-privacy dilemma: theory and implications of a privacy-preserving contract
Authors
KeywordsPersonalization
Privacy
Mechanism design
Welfare analysis
Issue Date2010
AbstractPersonalization is an integral part of e-commerce strategy today. A unique feature of personalization is that it requires users to provide a certain amount of personal information to the service provider, thus giving rise to an interesting dilemma in that consumers cannot enjoy more personalized services without sacrificing more privacy. In this paper, we propose a mechanism that allows an online personalization vendor to provide proper incentives for consumers to share information, while protecting their privacy at the same time. The proposed solution not only enables consumers and the firm to engage in an otherwise unviable market, but it also allows the firm to implement an incentive-compatible menu that serves all consumers regardless of their privacy sensitivity. Further, we demonstrate that a minimum privacy-preservation policy is an effective device for protecting consumers’ online privacy, and that it outperforms restricting vendors’ ability in collecting customer information. Our proposed mechanism is of theoretical and practical importance: By transforming the compensation schedule (privacy preservation) into a set-compliment device to the production variable, our approach offers an alternative to the reliance on external transfer, thus eradicating a major constraint confronted by traditional mechanism design. Practically, our research proposes a realistic, easily-implementable solution to the fervent calls for endowing consumers with greater control over their online privacy. Further, it offers important policy guidelines to the regulator on not only what devices can be applied in governing the information practice of online vendors, but also exactly how social-efficiency can be enhanced.
DescriptionWorking papers series
Persistent Identifierhttp://hdl.handle.net/10722/161244
SSRN

 

DC FieldValueLanguage
dc.contributor.authorSin, RG-
dc.contributor.authorJia, J-
dc.date.accessioned2012-08-20T09:05:29Z-
dc.date.available2012-08-20T09:05:29Z-
dc.date.issued2010-
dc.identifier.urihttp://hdl.handle.net/10722/161244-
dc.descriptionWorking papers series-
dc.description.abstractPersonalization is an integral part of e-commerce strategy today. A unique feature of personalization is that it requires users to provide a certain amount of personal information to the service provider, thus giving rise to an interesting dilemma in that consumers cannot enjoy more personalized services without sacrificing more privacy. In this paper, we propose a mechanism that allows an online personalization vendor to provide proper incentives for consumers to share information, while protecting their privacy at the same time. The proposed solution not only enables consumers and the firm to engage in an otherwise unviable market, but it also allows the firm to implement an incentive-compatible menu that serves all consumers regardless of their privacy sensitivity. Further, we demonstrate that a minimum privacy-preservation policy is an effective device for protecting consumers’ online privacy, and that it outperforms restricting vendors’ ability in collecting customer information. Our proposed mechanism is of theoretical and practical importance: By transforming the compensation schedule (privacy preservation) into a set-compliment device to the production variable, our approach offers an alternative to the reliance on external transfer, thus eradicating a major constraint confronted by traditional mechanism design. Practically, our research proposes a realistic, easily-implementable solution to the fervent calls for endowing consumers with greater control over their online privacy. Further, it offers important policy guidelines to the regulator on not only what devices can be applied in governing the information practice of online vendors, but also exactly how social-efficiency can be enhanced.-
dc.languageeng-
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectPersonalization-
dc.subjectPrivacy-
dc.subjectMechanism design-
dc.subjectWelfare analysis-
dc.titleResolving the personalization-privacy dilemma: theory and implications of a privacy-preserving contracten_US
dc.typeOthersen_US
dc.identifier.emailSin, RG: rays@hku.hk-
dc.description.naturepreprint-
dc.identifier.spage1-
dc.identifier.epage48-
dc.identifier.ssrn1700165-

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats