Final Key Concepts Flashcards
Summarize and describe the provisions in the 2015 Net Neutrality order.
Companies were prohibited from
- “Blocking” lawful content, applications, services, or non-harmful devices
- “Throttling” (impairing or slowing) lawful internet traffic on the basis of content, applications, services, or use of non-harmful devices
- Engaging in “paid prioritization,” which is defined as favoring some internet traffic over others in exchange for consideration
Name three reasons for government intervention in the realm of privacy protection.
- Imperfect information argument (consumers may not know info is being collected)
- Combining and selling data without awareness (EX: IP address with other data to get physical address)
- Competition may not result in optimal provision of privacy
What are 5 emerging competitive concerns related to big data and its uses?
- Agreement on Control
- Benefits vs. Harms: Benefits of revealing data must be weighed against the harm that can come from reducing privacy
- Challenges in incentivizing: Private incentives to invest in data security are unlikely to lead to socially optimal levels, contracts are hard to enforce, misuse of data is difficult to trace to a specific breach
- Danger of harm: Individuals who withhold info can inflict harm
- Excludability: Data can be made perfectly excludable by storing offline (reduces commercial and social value)
What is the GDPR and what does it do?
- Comprehensive data privacy and protection law enacted by the EU, designed to harmonize data privacy laws
- Alters how businesses behave through the use of fines
What are the 6 key principles of the GDPR?
- Lawfulness, fairness, and transparency
- Purpose limitation
- Data minimization
- Accuracy
- Storage limitation
- Integrity and confidentiality
According to MacCarthy, what are the three reasons to reject privacy as an individual choice as a framework for privacy regulation?
- Choice overload and lack of understanding: Relying on notice and choice to protect privacy will overwhelm users with too many choices to manage and too little understanding of what they are being asked to agree to (privacy notices are widely ignored, choice fatigue –> subjects accept whatever default is offered)
- Informational externalities (information disclosed by some people reveals info about others)
- Relational character of data itself: nature of data involves multiple parties, record-keeping throughout the economy, EX: browsing history will include info about who you follow)
What are three challenges to studying the GDPR as an event study as enumerated in Johnson, Economic Research on Privacy regulation?
- Large scale limits possible control groups
- GDPR compliance and enforcement varies by industry, compliance requirement, firm size, country, and over time (Creates gaps between the regulation as written and the regulation in practice)
- GDPR may directly restrict the availability of individual-level data that economists can use to understand the impact of the regulation
In the “Economics and Implications of Data”, what are the four challenges to growth through efficiency and innovation?
- Data markets are opaque, may lead to too much collection and too little privacy
- Incumbents have an incentive to hoard data (potentially stifling competition and reducing the social benefits that could flow from wider access)
- Insufficient data security measures: Unclear that companies are doing enough to protect the data they hold, creating risks to stability that should be mitigated with measures to ensure that all market participants invest adequately in cybersecurity
- Without some coordination across countries, there is a risk that global data markets could become fragmented
What is new about data that causes policy makers to rethink its implications?
- Reduced costs of collecting and storing data
- More powerful: More advanced processing to extract greater value from available data (AI, machine learning, algorithms)
What are the three economic characteristics of data that present challenges to policy-makers?
- Nonrival
- Involves externalities
- Partially excludable
Nonrival definition
Same data can be used by many, society will benefit most from data when it is widely shared, but policies and private decisions affect whether it will be so in practice
Data involves externalities definition
- Collection, sharing, and processing of personal data by one agent imposes costs on others by affecting their privacy
Partially excludable definition
- Certain parts or aspects of the data can be restricted or controlled, while other parts remain accessible to a wider audience
- Key policy question: to what extent do private data collectors and processors have adequate incentives to invest in protecting their data, particularly in the case of individual data about others
Name and describe two economic forces that affect the adoption of technology across countries
- Unmet demand for financial services (basic banking, means of payment, money transfer)
- High cost of traditional finance (greater incentives for fintech adoption in high-cost areas)
- Regulation (countries with better quality of regulation have higher volumes of alternative finance)
- Demographics (younger)
Pros of CBDCs (5)
- Safely meet future needs and demands for payment services
- Improvements to cross-border payments
- Support the dollar’s international role
- Financial inclusion
- Extend public access to safe central bank money
