Information Frictions and Heterogeneity in Valuations of Personal Data
We investigate how consumer valuations of personal data are affected by real worldinformation interventions. Proposals to compensate users for the information they dis-close to online services have been advanced in both research and policy circles. Theseproposals are hampered by information frictions that limit consumers’ ability to assessthe value of their own data. We use an incentive compatible mechanism to captureconsumers’ willingness to share their social media data for monetary compensation, andestimate distributions of valuations of social media data before and after an informationtreatment. We find evidence of significant dispersion and heterogeneity in valuationsbefore the information intervention, with women, Black, and low income individualsreporting systematically lower valuations than other groups. After an information in-tervention, we detect significant revisions in valuations, concentrated among individualswith low initial valuations. Dispersion and heterogeneity in valuations across these de-mographic groups decrease, but persist, after the information intervention. The findingssuggest that strategies aimed at reducing information asymmetries in markets for per-sonal data may increase consumer welfare. At the same time, the findings highlight howconsumer valuations of personal data are only in part influenced by market information.