The Role of User Privacy Concerns in Shaping Competition among Platforms
We study the effect of user privacy concerns on competition between online advertising platforms. Online platforms attract advertisers by offering capabilities to reach audiences likely to be receptive to their ads in a timely and accurate manner. However, the collection and processing of user information required for targeting of ads may lead to privacy concerns. We model the competition between two platforms as a two-stage game where platforms announce their targeting capabilities in the first stage and advertising fees in the second stage.
Nabita Penmetsa is an Assistant Professor at the University of Utah’s David Eccles School of Business, in the department of Operations and IS.