Identity Management, Privacy, and Price Discrimination

In economics, privacy is usually discussed in the context of consumer preferences and price discrimination. But what forms of personal data privacy are compatible with merchants' interests in knowing more about their consumers, and how can identity management systems protect information privacy while enabling personalization and price discrimination?     

Privacy and rationality in individual decision making

Traditional theory suggests consumers should be able to manage their privacy. Yet, empirical and theoretical research suggests that consumers often lack enough information to make privacy-sensitive decisions and, even with sufficient information, are likely to trade off long-term privacy for short-term benefits