Seminar in Makroökonomik Detail

Speaker:
Haiping Zhang (University of Auckland Business School)

Privacy Concerns and Innovation in the Data Economy

Abstract: This paper introduces consumer data as an input for R&D in a tractable Schumpeterian model and shows that privacy concerns tend to reduce data use and innovation under the market equilibrium. If privacy concerns are below (above) a threshold value, data use should be subsidized (taxed) so as to raise (reduce) the growth rate to the socially optimal level. I also analyze the optimal policy in the presence of negative data externalities. These findings shed light on the cross-country difference in consumer data regulation and growth rate in the data economy

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