The Economics of Social Data

The rise of large digital platforms - such as Facebook, Google, and Amazon in the US and JD, Tencent and Alibaba in China - has led to the unprecedented collection and commercial use of individual data.  A central feature of the data collected from individuals is their social aspect. With this term, we mean that the data captured from an individual user are informative not only about that individual but also about other individuals with similar characteristics or behaviors. The social dimension of the data can simultaneously lead to a loss of privacy and a gain in information. In any case, the social nature of the data generates a data externality, the sign and magnitude of which depend on the structure of the data and the use of the gained information. In this lecture Dirk Bergemann will analyze central aspects of the economics of social data.