Facebook Is Creepy. And Valuable.

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Facebook Is Creepy. And Valuable.
As Alessandro Acquisti of Carnegie Mellon University
and colleagues put it in a recent paper, the question is “to what extent the combination of sophisticated analytics and massive amounts of consumer data will lead to an increase in aggregate welfare, and to what extent will it lead to mere changes in the allocation of wealth?”
“We don’t understand the value to us of the new data economy nor the risks it entails,” said Leonard Nakamura,
an economist at the Federal Reserve Bank of Philadelphia who has studied the economic impact of data.
Though surveys repeatedly find that Americans are concerned about their privacy, they rarely take action to stop cookies
and other tools deployed to gather their data — leading scholars to coin the term “privacy paradox.” As Sinan Aral of the Sloan School of Management at the Massachusetts Institute of Technology has noted, “Lots of the things that depend on ads we want as public goods.”
Critically, to regulate the data-enabled world, we must first figure out what we stand to lose if the data goes uncollected.
Amazon and others have already experimented with mining our data to charge “personalized” prices for a given
item — the maximum price each of us is willing to pay — a practice that can leave many consumers worse off.
Congress is good at two things: doing nothing, and overreacting,” he said.

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