Price discrimination and product quality under opt-in privacy regulation

We study how an opt-in regime of privacy regulation, which limits the scope for online price discrimination, affects product quality and consumer surplus. When consumers decide to share personal data, they benefit from complementarity between information quality, but pay personalized prices instead a uniform price. find that, if is strong enough, then higher with than without regime. Privacy regulation may have conflicting effects on different attitudes towards privacy, increase in necessary improve total Interestingly, these results hold both under monopoly imperfect market competition. thus recommend that protection measures be grounded relation quality.