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The value of my data is not that it can train a statistical model about preferences of developers in their 30s - that's absolutely marginal. My personal data is

The value of my data is not that it can train a statistical model about preferences of developers in their 30s - that's absolutely marginal. My personal data is useful in itself as a proxy for my own life, my preferences, my buying habits, it's a map on how to influence and predict my behavior, possibly against my will. A company having exclusive access to all my personal data, emails, etc. can for example, infer that I have an urgent need to buy an airline ticket to visit my sick father, and extract my reserve price for that ticket, as opposed to an average price for all passengers. Or it can deduce the minimal paycheck I am willing to accept for a job. So even in the unlikely case I can recover the full value of my data from the market, I haven't really earned anything. My information differential is a competitive advantage in the market, and selling it is self defeating, companies are not selling or giving their data back to me. So the more data you sell or give, the larger the asymmetry grows until the only deals you can make are bad deals. Edit: I can neither confirm nor deny I am developer and/or in my 30s

nerfhammer 8y ago
In your example you're assuming that there is monopoly control over whatever product you're trying to buy. But that's usually not the case: there is more than one airline, for example. If it were possible to market products exclusively to people who wanted that exact product, companies would no longer need to waste money on broadly targeted advertising and compete more directly on price and product features and not on marketing budget. You would get "paid" in cost savings. Of course that's generally not really possible no matter how much of your data marketers could reasonably know about. A grab bag of "data" from an individual person barely predicts much of anything, which is the real reason there isn't much of a market for it.
- bumholio 8y ago
  Indeed - but markets are rarely perfectly competitive, to negate any advantage price discrimination can bring. For example, it's often the case a route/date combo is offered by a single airline. I also agree that information can be beneficial for me, helping companies finding me easier without spending on advertising etc. But in that case, I would simply give that information away and share it as broadly as possible (for example, by searching multiple sites for the products I am interested in); so that side of the coin is not relevant for someone selling his information.
  - TomMarius 8y ago
    You can buy the ticket anonymously. There doesn't have to be any link between data about your grandfather and your identity you're using to buy the ticket. Why would you even give anyone data about your grandparents?
    - chimeracoder 8y ago
      > You can buy the ticket anonymously. There doesn't have to be any link between data about your grandfather and your identity you're using to buy the ticket. How do you propose buying an airplane ticket anonymously?
      - croddin 8y ago
        On some booking sites it might actually be a good idea to open them in incognito mode, and you can get a quote without them using data linked to you.
        mtgx 8y ago
        I've noticed tracking that can track across browsers and their incognito modes even with ublock origin enabled. It may have tracked me by ip, I don't know but I feel like we're getting to the point where the existing incognito modes are useless.
      - TomMarius 8y ago
        Today: Anonymous mode. I've maybe chosen a wrong word. I meant independently from your "other" identity.
        chimeracoder 8y ago
        > Today: Anonymous mode. I've maybe chosen a wrong word. I meant independently from your "other" identity. Well, except for the part where you have to enter your legal name and date of birth.
- jarfil 8y ago
  There may be more than one airline, but quite often there is just a single airline that meets the criteria for the flight and service quality you require. Even when there are competing companies, being able to accurately quantify how much are you willing to pay, would allow companies to always charge max price, just by setting their "normal prices" much higher and then offering you personalized "discounts". With multiple companies buying your data from intermediary brokers, it would effectively become a way of per-customer price fixing, while at the same time reducing competition when only a single company gets your data and presents you with an offer you can (barely) accept.
- karmakaze 8y ago
  > there is more than one airline, for example True, but there could be a centralized market for data that all airlines buy from.
- Vinnl 8y ago
  > But that's usually not the case: there is more than one airline, for example. I am afraid we are moving to a world where that is somewhat the case. Not that there's a single airline, but where there's a single place to book an airline ticket, a single place to book accommodation, or a single place to book a taxi, for instance. The intermediary (e.g. Airbnb, Uber, etc.) can then jack up their commission as far as possible based on your profile. Users can't move because all suppliers are using that intermediary, and suppliers are forced to use that intermediary because that's where the clients are. Meanwhile, intermediary's are able to extract everything that's currently going into people's savings accounts.
soared 8y ago
Why are you assuming it will be used nefariously to price gouge? What if an air-plane taxi startup bought the data and offered you a ticket for cheaper than a normal airline ticket?
- stochastic_monk 8y ago
  Then someone else would be price-gouged. No company is putting effort into harvesting or mining personal data without an expectation of ROI, and that comes by increasing revenue and decreasing costs. Perhaps costs would go down for some individuals, but there would be an increase in others’ costs to more than compensate. Otherwise, the company is wasting money.
  - gowld 8y ago
    If you operate on the assumption that it's immortal if any profit isn't perfectly distributed according to your own personal sense of how much each person deserves to pay, you can't have a functioning market. Any system with non-zero overhead can't possibly price things purely on a cost+% basis.
  - nostrademons 8y ago
    The economy is not zero-sum. If you're getting offered airplane tickets for cheaper than what everyone paid, it's probably because the airline has extra seats available on the plane that would otherwise go unused. No airline would bump a passenger paying a higher fare in favor of a passenger paying a lower fare (barring PR disasters and such) - they'd be strictly losing money on that deal. Offering an unused seat for less money because they have knowledge that you would buy it at a discount price makes everybody strictly better off - you gain a discount vacation at a price you otherwise couldn't get, they sell a seat that would they would otherwise waste, and the data broker who arranges the transaction takes a cut of the value generated by this transaction.
    - stochastic_monk 8y ago
      Such cases exist. I do not expect most corporations to primarily (and certainly not exclusively) use customer information to do so.
acchow 8y ago
It's not always a zero-sum game. Sure, there are cases of price discrimination - why would you sell a piece of data for $1 which allows a company to charge you $2 more for something you're going to buy. But there's increases in efficiencies: 1) Get me to buy a similar product from competitor B instead of A since it's a better fit for my needs wherein I wouldn't have been aware of B 2) Show me fewer ads by showing me more relevant ads
- Waterluvian 8y ago
  But the bottom line is that it will always bias towards their interest in making money. It's just nice when it so happens to align with your interests in buying neat stuff.
  - dotancohen 8y ago
    You do realize that the collection and mining of data exponentially increases the chances that advertisers with your interests will be shown to you? That is exactly the point.
AndrewKemendo 8y ago
This is an economically well informed response so thanks for writing it. The economist in me shakes my fist grumpily and says: You're contributing to an inefficient market by being opaque with your explicit preferences. Your point however I think about companies not giving data back to you is an important one, because I think it's true in some ways and false in others. True in the sense that - lets use google for example - you don't know the exact composition for how they make decisions internally. However, I would guess that Google doesn't even know that. Further, Google puts out a lot of information to shareholders and in their Annual reports, more data certainly about their finances than you send to Google - so it's not exactly the case that you aren't getting really good information on them. Not to mention the hundreds of articles daily on their current and future operations and products. I'd say you probably have more access to data about Google - in aggregate, if you want it - than they have on you. The economist's dream is that we all know our own pricing sensitivities and desires for goods and services, share that with the market, and the market responds by providing those goods and services at marginal cost for a supremely efficient market. That's kind of the goal of economics - perfectly predict human desires and build systems to facilitate those. You're response proves what we know however that individuals, companies or otherwise, are incentivised to not create efficient markets, but rather maintain information assymetries so that they can individually extract the most out of the market. I guess that is to say, I had never thought about that from the perspective of the consumer wanting to maintain the information asymmetry, I had only ever thought about firms trying to maintain the information power. It's an interesting and different way to think about it. Thanks.
- pdonis 8y ago
  > You're contributing to an inefficient market by being opaque with your explicit preferences. You don't make your preferences explicit in a market by selling them as data. You make your preferences explicit in a market by making trades. The prices at which you make the trades, and what you trade for, are the only information the market needs to be efficient. Which in itself makes the "let's pay customers for their data" line suspicious.
echevil 8y ago
On the other hand, if some company have all my data and knows what I would need when I need it, it'd help me save tons of time browsing irrelevant information. I hope they can get better doing that. e.g. Yelp has tons of information about what restaurants I like and what I dislike, they still gives me tons of useless recommendations.

nerfhammer 8y ago

In your example you're assuming that there is monopoly control over whatever product you're trying to buy. But that's usually not the case: there is more than one airline, for example. If it were possible to market products exclusively to people who wanted that exact product, companies would no longer need to waste money on broadly targeted advertising and compete more directly on price and product features and not on marketing budget. You would get "paid" in cost savings. Of course that's generally not really possible no matter how much of your data marketers could reasonably know about. A grab bag of "data" from an individual person barely predicts much of anything, which is the real reason there isn't much of a market for it.

bumholio 8y ago
Indeed - but markets are rarely perfectly competitive, to negate any advantage price discrimination can bring. For example, it's often the case a route/date combo is offered by a single airline. I also agree that information can be beneficial for me, helping companies finding me easier without spending on advertising etc. But in that case, I would simply give that information away and share it as broadly as possible (for example, by searching multiple sites for the products I am interested in); so that side of the coin is not relevant for someone selling his information.
- TomMarius 8y ago
  You can buy the ticket anonymously. There doesn't have to be any link between data about your grandfather and your identity you're using to buy the ticket. Why would you even give anyone data about your grandparents?
  - chimeracoder 8y ago
    > You can buy the ticket anonymously. There doesn't have to be any link between data about your grandfather and your identity you're using to buy the ticket. How do you propose buying an airplane ticket anonymously?
    - croddin 8y ago
      On some booking sites it might actually be a good idea to open them in incognito mode, and you can get a quote without them using data linked to you.
      - mtgx 8y ago
        I've noticed tracking that can track across browsers and their incognito modes even with ublock origin enabled. It may have tracked me by ip, I don't know but I feel like we're getting to the point where the existing incognito modes are useless.
    - TomMarius 8y ago
      Today: Anonymous mode. I've maybe chosen a wrong word. I meant independently from your "other" identity.
      - chimeracoder 8y ago
        > Today: Anonymous mode. I've maybe chosen a wrong word. I meant independently from your "other" identity. Well, except for the part where you have to enter your legal name and date of birth.
jarfil 8y ago
There may be more than one airline, but quite often there is just a single airline that meets the criteria for the flight and service quality you require. Even when there are competing companies, being able to accurately quantify how much are you willing to pay, would allow companies to always charge max price, just by setting their "normal prices" much higher and then offering you personalized "discounts". With multiple companies buying your data from intermediary brokers, it would effectively become a way of per-customer price fixing, while at the same time reducing competition when only a single company gets your data and presents you with an offer you can (barely) accept.
karmakaze 8y ago
> there is more than one airline, for example True, but there could be a centralized market for data that all airlines buy from.
Vinnl 8y ago
> But that's usually not the case: there is more than one airline, for example. I am afraid we are moving to a world where that is somewhat the case. Not that there's a single airline, but where there's a single place to book an airline ticket, a single place to book accommodation, or a single place to book a taxi, for instance. The intermediary (e.g. Airbnb, Uber, etc.) can then jack up their commission as far as possible based on your profile. Users can't move because all suppliers are using that intermediary, and suppliers are forced to use that intermediary because that's where the clients are. Meanwhile, intermediary's are able to extract everything that's currently going into people's savings accounts.

soared 8y ago

Why are you assuming it will be used nefariously to price gouge? What if an air-plane taxi startup bought the data and offered you a ticket for cheaper than a normal airline ticket?

stochastic_monk 8y ago
Then someone else would be price-gouged. No company is putting effort into harvesting or mining personal data without an expectation of ROI, and that comes by increasing revenue and decreasing costs. Perhaps costs would go down for some individuals, but there would be an increase in others’ costs to more than compensate. Otherwise, the company is wasting money.
- gowld 8y ago
  If you operate on the assumption that it's immortal if any profit isn't perfectly distributed according to your own personal sense of how much each person deserves to pay, you can't have a functioning market. Any system with non-zero overhead can't possibly price things purely on a cost+% basis.
- nostrademons 8y ago
  The economy is not zero-sum. If you're getting offered airplane tickets for cheaper than what everyone paid, it's probably because the airline has extra seats available on the plane that would otherwise go unused. No airline would bump a passenger paying a higher fare in favor of a passenger paying a lower fare (barring PR disasters and such) - they'd be strictly losing money on that deal. Offering an unused seat for less money because they have knowledge that you would buy it at a discount price makes everybody strictly better off - you gain a discount vacation at a price you otherwise couldn't get, they sell a seat that would they would otherwise waste, and the data broker who arranges the transaction takes a cut of the value generated by this transaction.
  - stochastic_monk 8y ago
    Such cases exist. I do not expect most corporations to primarily (and certainly not exclusively) use customer information to do so.

acchow 8y ago

It's not always a zero-sum game. Sure, there are cases of price discrimination - why would you sell a piece of data for $1 which allows a company to charge you $2 more for something you're going to buy. But there's increases in efficiencies: 1) Get me to buy a similar product from competitor B instead of A since it's a better fit for my needs wherein I wouldn't have been aware of B 2) Show me fewer ads by showing me more relevant ads

Waterluvian 8y ago
But the bottom line is that it will always bias towards their interest in making money. It's just nice when it so happens to align with your interests in buying neat stuff.
- dotancohen 8y ago
  You do realize that the collection and mining of data exponentially increases the chances that advertisers with your interests will be shown to you? That is exactly the point.

AndrewKemendo 8y ago

This is an economically well informed response so thanks for writing it. The economist in me shakes my fist grumpily and says: You're contributing to an inefficient market by being opaque with your explicit preferences. Your point however I think about companies not giving data back to you is an important one, because I think it's true in some ways and false in others. True in the sense that - lets use google for example - you don't know the exact composition for how they make decisions internally. However, I would guess that Google doesn't even know that. Further, Google puts out a lot of information to shareholders and in their Annual reports, more data certainly about their finances than you send to Google - so it's not exactly the case that you aren't getting really good information on them. Not to mention the hundreds of articles daily on their current and future operations and products. I'd say you probably have more access to data about Google - in aggregate, if you want it - than they have on you. The economist's dream is that we all know our own pricing sensitivities and desires for goods and services, share that with the market, and the market responds by providing those goods and services at marginal cost for a supremely efficient market. That's kind of the goal of economics - perfectly predict human desires and build systems to facilitate those. You're response proves what we know however that individuals, companies or otherwise, are incentivised to not create efficient markets, but rather maintain information assymetries so that they can individually extract the most out of the market. I guess that is to say, I had never thought about that from the perspective of the consumer wanting to maintain the information asymmetry, I had only ever thought about firms trying to maintain the information power. It's an interesting and different way to think about it. Thanks.

pdonis 8y ago
> You're contributing to an inefficient market by being opaque with your explicit preferences. You don't make your preferences explicit in a market by selling them as data. You make your preferences explicit in a market by making trades. The prices at which you make the trades, and what you trade for, are the only information the market needs to be efficient. Which in itself makes the "let's pay customers for their data" line suspicious.

echevil 8y ago

On the other hand, if some company have all my data and knows what I would need when I need it, it'd help me save tons of time browsing irrelevant information. I hope they can get better doing that. e.g. Yelp has tons of information about what restaurants I like and what I dislike, they still gives me tons of useless recommendations.