The Market for Commercial Information
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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.
KeywordsPersonal Information Advertising Agency Internet Advertising Credit Reporting Credit Information
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- 54.Patrick Barta, “During Heightened Demand, Lenders Customize Home Loans,” The Wall Street Journal, January 5, 2001, online edition.Google Scholar
- 55.Number of individuals and number of credit bureaus from the Associated Credit Bureau website, http://www.acb-credit.com/, visited March 14, 2001.
- 57.A legitimate business need is defined in Section 604 of the Fair Credit Reporting Act (FCRA) available at http://www.acb-credit.com/.
- 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
- 59.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
- 60.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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- 73.“All rates are expressed in cost per thousand (CPM) ad banner impressions.” From DoubleClick’s Rate Card, http://www.doubleclick.net:80/us/advertisers/media/networkinfo/rate-card.asp?asp_object_l=& visited February 22, 2001. Other advertising agencies such as 24/7 have similar statements.
- 74.Margaret Barnett, “The Profilers: Invisible Friends,” The Industry Standard, March 13, 2000, p. 220.Google Scholar
- 75.Daniel J. Solove, “Privacy and Power: Computer Databases and Metaphors for Information Privacy,” p. 27, available online through SSRN. This paper is not published, but has been the subject of a New York Times story: Carl S. Kaplan, “Kafkaesque? Big Brother? Finding the Right Literary Metaphor for New Privacy,” February 2, 2001. Solove is still in favor of regulation, however, and he perceives other dangers from online information, although the harm is “difficult to describe” and “difficult to quantify” (p. 40).Google Scholar
- 76.For an important discussion of the value of information from an economic perspective, see Carl Shapiro and Hal Varian, Information Rules: A Strategic Guide to the Network Economy, Cambridge, MA: Harvard Business School Press, 1999.Google Scholar
- 77.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
- 78.Ross D. Petty, “Marketing Without Consent: Consumer Choice and Costs, Privacy and Public Policy,” 19 Journal of Public Policy and Marketing, Spring, 2000, 42–53, at 42.Google Scholar
- 79.Ross D. Petty, “Marketing Without Consent: Consumer Choice and Costs, Privacy and Public Policy.”Google Scholar