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Nonrivalry and the Economics of Data

  • Charles I. Jones
  • Christopher Tonetti
American Economic Review
vol. 110, no. 9, September 2020
(pp. 2819-58)
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Abstract

Data is nonrival: a person's location history, medical records, and driving data can be used by many firms simultaneously. Nonrivalry leads to increasing returns. As a result, there may be social gains to data being used broadly across firms, even in the presence of privacy considerations. Fearing creative destruction, firms may choose to hoard their data, leading to the inefficient use of nonrival data. Giving data property rights to consumers can generate allocations that are close to optimal. Consumers balance their concerns for privacy against the economic gains that come from selling data broadly.

Citation

Jones, Charles I., and Christopher Tonetti. 2020. "Nonrivalry and the Economics of Data." American Economic Review, 110 (9): 2819-58. DOI: 10.1257/aer.20191330

Additional Materials

JEL Classification

  • C80 Data Collection and Data Estimation Methodology; Computer Programs: General
  • D11 Consumer Economics: Theory
  • D21 Firm Behavior: Theory
  • D83 Search; Learning; Information and Knowledge; Communication; Belief; Unawareness
  • E22 Investment; Capital; Intangible Capital; Capacity
  • K11 Property Law
  • O34 Intellectual Property and Intellectual Capital