Preference-Based Privacy Trading

TL;DR

This paper explores the economic feasibility of trading consumer personal data with consent, proposing a mechanism that balances privacy preferences and data demand in oligopoly markets.

Contribution

It introduces a novel preference function bidding approach for privacy-preserving data trading mechanisms in oligopoly markets.

Findings

Proposes regulated economic mechanisms for data trading with privacy constraints.

Balances heterogeneous privacy preferences with data demand requirements.

Addresses practical issues of data leakage and consumer compromise levels.

Abstract

The question we raise through this paper is: Is it economically feasible to trade consumer personal information with their formal consent (permission) and in return provide them incentives (monetary or otherwise)?. In view of (a) the behavioral assumption that humans are `compromising' beings and have privacy preferences, (b) privacy as a good not having strict boundaries, and (c) the practical inevitability of inappropriate data leakage by data holders downstream in the data-release supply-chain, we propose a design of regulated efficient/bounded inefficient economic mechanisms for oligopoly data trading markets using a novel preference function bidding approach on a simplified sellers-broker market. Our methodology preserves the heterogeneous privacy preservation constraints (at a grouped consumer, i.e., app, level) upto certain compromise levels, and at the same time satisfies information demand (via the broker) of agencies (e.g., advertising organizations) that collect client data for the purpose of targeted behavioral advertising.