Privacy as a Public Good: A Case for Electronic Cash
Year: 2021
Type: article
Abstract: Privacy is a feature inherent to the use of cash. With steadily increasing market shares of digital payment platforms, privacy in payments may no longer be attainable in the future. We explore the potential welfare impacts of reductions in privacy in payments. In our framework, firms may use data collected through payments to price discriminate future consumers. A public good aspect arises because individuals do not internalize the full cost of failing to protect their privacy and reduce social welfare by suboptimally choosing not to protect their privacy in payments. We discuss potential remedies, including the issuance of electronic cash.
Source: Journal of Political Economy
DOI: 10.1086/714133
Institutions: University of California, Santa Barbara, Bank of Canada
Language: English
Subfield: Sociology and Political Science
Field: Social Sciences
Domain: Social Sciences
Open Access status: green
OpenAlex ID: W3135051226