Don’t miss a good (short) take on ownership of personal information by Dylan Walsh on Stanford GSB Insights. Some highlights:
Data, like ideas, is peculiar in one very important dimension: Whereas most goods in any economy are scarce — if you buy a car or eat a sandwich, your neighbor can’t buy that same car or eat that same sandwich — data is limitless. “Data is just a string of ones and zeroes, and whether it’s used by one person, or 10 people, or a million people, it doesn’t get depleted,” says Jones. (In economic terms, data is nonrival, while most other goods are rival.) “At some level, that means there is inherent social value in sharing data.”
This gives rise to two competing interests. On one side is privacy. “People have a natural tendency to not want everything shared,” Jones says. The same is true of companies, which hoard data for competitive advantage; if a company made all of its consumer information public, then competitors could more easily undermine its business.
How do you balance concerns over privacy, competition, and efficiency when considering a market for data? To answer this question, Jones and Tonetti started by modeling an optimal economy managed by a benevolent dictator who respects all of the variables in play. This scenario was used as a benchmark of what it looks like to maximize welfare.
Against this ideal, they then tested three scenarios conceivable in today’s world: Companies own data, people own data, or the sharing of data is essentially outlawed.
One of the next big questions for Jones and Tonetti is how to actually design a marketplace through which individual consumers are able to preserve and sell their data. Though nothing like this yet exists, “people are thinking about it and working on it,” says Jones. “There are ways to use blockchain with other novel technologies so that consumers own their data and the scenario we laid out could be a reality.”
In the meantime, the companies that control most of this imperishable private data continue to send mixed messages about whether they or consumers should own it — and thus profit from it.