Unraveling Privacy as Corporate Strategy

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4 Responses

  1. Frank Pasquale says:

    Your article looks very interesting and I look forward to reading it.

    I’d take your observations in two directions here. First, privacy appears to be something of a reverse positional good. As a recent paper stated, “Many goods have positional value (as opposed to functional value) because they increase the status of their consumers.” But you’re projecting a world where people are lower status, the less they reveal. Or, to reverse it, people who “purchase” more privacy end up paying for it with lower social position.

    Unfortunately, I am afraid that mainstream economics can’t really accommodate the concerns raised by positional or reverse-positional goods. That’s one reason my piece in Northwestern this year argues for supplementing (and perhaps replacing) economic reasoning on privacy with broader accounts of the social aims of privacy law, fair data practices, and reputation regulation.

    I think one of those social aims is to rebalance power between the watchers and the watched. My “thought piece” at this symposium pursues that idea, calling it “reciprocal transparency:”

    Unraveling may mean that we can’t do much to stop corporate and government officials from learning ever more details about our lives. But we can at least implement immutable audit logs to assure that every use the “watchers” make of that data is itself logged.

    Finally, for some scary directions this is all going, check out this prediction from Sharona Hoffman:

    “Employers or their hired experts may develop complex scoring algorithms based on electronic health records to determine which individuals are likely to be high-risk and high-cost workers.”
    (in 19-SPG Kan. J.L. & Pub. Pol’y 409)

  2. Frank says:

    PS: I have a sense that the defenders of unraveling will argue that their system only determines good “fit”, not winners and losers. If so, this post of mine on zero-sum games may be of interest:


  3. Anonymous Coward says:

    If the problem is that people are being coerced to disclose information about themselves, the solution seems simple enough: Make sure the law does not allow anyone to be punished for intentionally disclosing false information. Then the unraveling process is destroyed because anyone who is coerced to disclose can just disclose false information.

    Another alternative is shunning. That is, everyone who is not of the “best” type boycotts or otherwise retaliates against anyone who discloses so that the cost of disclosure is greater than the benefit for those of the “best” type and the unraveling never gets started. (Obviously this won’t work if the large majority is the “best” type.)

  4. Ryan Calo says:

    @Scott: I couldn’t get a decent credit card fifteen years ago. I had to build up some history. But one hundred years ago, I could describe my spending history until I was blue in the face—credit only flowed to the already rich. Unraveling, or a better lending technique?

    @Frank: I forgot to mention this at Yale but Samuel Bray has a fantastic article about how some rules exist to change power dynamics. It’s called “Power Rules” and I believe it’s in Columbia Law Review.