a column by Daron Acemoğlu, Ali Makhdoumi, Azarakhsh Malekian and Asuman Ozdaglar for VOX: CEPR’s Policy Portal
The Cambridge Analytica scandal highlighted the sophisticated ways social media platforms can allow companies to infer information about users and non-users from shared data.
This column shows how correlations between platform users’ and non-users’ characteristics mean companies can obtain data at below equilibrium prices, implying welfare inefficiencies for individuals. The authors make some suggestions of regulations that could improve on these data-sharing inefficiencies for users and non-users of the platforms.
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