The Market for Commercial Information

  • Paul H. Rubin
  • Thomas M. Lenard


This chapter examines the functioning of the market for commercial information and the benefits it provides for consumers. The markets discussed here were important before the Internet, but the Internet has greatly increased their efficiency and scope.


Personal Information Advertising Agency Internet Advertising Credit Reporting Credit Information 
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  1. 54.
    Patrick Barta, “During Heightened Demand, Lenders Customize Home Loans,” The Wall Street Journal, January 5, 2001, online edition.Google Scholar
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    Number of individuals and number of credit bureaus from the Associated Credit Bureau website,, visited March 14, 2001.
  3. 57.
    A legitimate business need is defined in Section 604 of the Fair Credit Reporting Act (FCRA) available at
  4. 58.
    The Gramm-Leach-Bliley law, as interpreted by a recent court decision, appears to place additional limits on the dissemination of personal credit data. See Individual References Service Group, In. v. FTC, et al., Civil Action No. 00-1828, and Trans Union LLC v. FTC, et al., Civil Action No. 00-2087 (D.D.C. April 30, 2001). The implications of this decision for the commercial information market remain to be seen.Google Scholar
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    See definition in glossary and discussion in Chapter 3. The basic theoretical argument is in Michael Rothschild and Joseph Stiglitz, “Equilibrium in Competitive Insurance Markets: An Essay on the Economics of Imperfect Information,” 90 Quarterly Journal of Economics, 629–649, 1976.Google Scholar
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    Walter F. Kitchenman, “US Credit Reporting: Perceived Benefits Outweigh Privacy Concerns,” The Tower Group, Newton, Mass., 1998; Marty Abrams, “The Economic Benefits of Balanced Information Use,” in The Future of Financial Privacy, Competitive Enterprise Institute, Washington, 2000.Google Scholar
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    Thomas E. Weber, “Why Companies Are So Eager To Get Your E-Mail Address,” The Wall Street Journal, February 12, 2001.Google Scholar
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    “All rates are expressed in cost per thousand (CPM) ad banner impressions.” From DoubleClick’s Rate Card, visited February 22, 2001. Other advertising agencies such as 24/7 have similar statements.
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    Summarized in Paul H. Rubin “Economics and the Regulation of Deception,” Cato Journal, 1991, 667–690, 1991 and John E. Calfee, Fear of Persuasion: A New Perspective on Advertising and Regulation, American Enterprise Institute, Washington, 1997.Google Scholar
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Copyright information

© Springer Science+Business Media New York 2002

Authors and Affiliations

  • Paul H. Rubin
    • 1
    • 2
  • Thomas M. Lenard
    • 2
  1. 1.Emory UniversityUSA
  2. 2.The Progress & Freedom FoundationUSA

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