Literature Review: The Economics of Social Data

Big tech companies like Google, Amazon, and Facebook have amassed an unprecedented collection of individual data. The authors demonstrate why data ownership is insufficient to give consumers control over their data and how individual data is actually social data due to data externalities. The paper explores the effects of collecting individual data, terms of trade between consumers and digital platforms, the social dimension of data, and how data intermediaries change the level of aggregation and precision of information they provide. The authors find that the revenue-maximizing data policy is to collect consumer data but not forward it to producers.