[LINK] Professors Call Both Sides Wrong on Privacy

Richard Chirgwin rchirgwin at ozemail.com.au
Thu Oct 26 14:53:49 AEST 2006

Geoff Ramadan wrote:
> The trouble is, that you cannot run a business (any business including 
> Government business) with out information.

The trouble is ... "without information" is a long way from justifying 
"any information I wish to collect, which I can use for any purpose, and 
retain for as long as I choose".


> Regards
> Geoffrey Ramadan, B.E.(Elec)
> Chairman, Automatic Data Capture Australia (www.adca.com.au)
> and
> Managing Director, Unique Micro Design (www.umd.com.au)
> Adam Todd wrote:
>> See I have this issue about Fraud.
>> You can't defraud if you have no information.  Because you can't 
>> create a fraudulent entity without first getting information. (Or 
>> creating it from nothing.)
>> You can't beat fraud by removing privacy, because the mere fact that 
>> a person can retain their privacy and oppose another using their 
>> identity fraudulently proves the fraud.
>> Giving our private information increases the chance of fraud 
>> multiple.  I know, I have a father who uses my name, date of birth 
>> and address as a means of identifying himself as me.
>> It's hard to prove I'm me, when he knows my details and identifies 
>> himself as me first.  Who am I?  According to some, I'm not who I 
>> claim to be.
>> At 06:56 AM 26/10/2006, Bernard Robertson-Dunn wrote:
>>> Professors Call Both Sides Wrong on Privacy
>>> Sue Bushell
>>> CIO
>>> 24/10/2006 12:40:06
>>> http://www.cio.com.au/index.php/id;1659801180;fp;4;fpid;21
>>> Should households be granted the right to control their personal 
>>> information and to refuse to give it out, as some privacy advocates 
>>> insist? Or are those economists right who argue that privacy in any 
>>> form is harmful since it restricts information flow and hence 
>>> inhibits decision-making, increases transaction costs and encourages 
>>> fraud?
>>> Two professors at University of California, Berkeley's Haas School 
>>> of Business have recently weighed in on this seemingly endless 
>>> debate to argue their conclusion that neither approach is right.
>>> In an article in the September issue of the journal Quantitative 
>>> Marketing and Economics, Professors Benjamin Hermalin and Michael 
>>> Katz note that privacy can be efficient in certain circumstances but 
>>> that privacy property rights - personal control over one's personal 
>>> information - are often worthless.
>>> "Our analysis demonstrates that there are complicated tradeoffs 
>>> missed by both sides of the debate," they write. "Certainly in the 
>>> case of employment, changes in privacy policy can make some 
>>> households winners and others losers."
>>> The authors note that there has been a long history of contentious 
>>> policy debates and governmental efforts to protect personal privacy, 
>>> particularly the ability to maintain control over the dissemination 
>>> of personally identifiable data: privacy as secrecy.
>>> And they say recent technological developments in information 
>>> collection and processing have heightened privacy concerns, with 
>>> online bookstores knowing what you like to read, TiVo reporting 
>>> personal viewing habits to the company's central database, and 
>>> airlines keeping a record of where you travel. Meanwhile every year 
>>> privacy bills are introduced in state legislatures and the US 
>>> Congress in response to privacy concerns, yet there is little 
>>> consensus on the appropriate approach.
>>> "There are many calls for strong governmental intervention to 
>>> restrict the use of personally identifiable data. However, there are 
>>> also calls simply to establish appropriate property rights to 
>>> information on the grounds that market forces will then lead to 
>>> efficient privacy levels," they say.
>>> The authors note that proponents of the Chicago School have labelled 
>>> privacy harmful to efficiency because it stops information flows 
>>> that would otherwise lead to improved levels of economic exchange. 
>>> And they agree there are some situations in which allowing 
>>> households to reveal personally identifiable information is 
>>> beneficial because it allows firms to make tailored offers that 
>>> facilitate transactions that otherwise might not have occurred.
>>> Yet they insist that, contrary to the Chicago School argument, the 
>>> flow of information from one trading partner to the other can reduce 
>>> ex post trade efficiency when the increase in information does not 
>>> lead to symmetrically or fully informed parties.
>>> With so many people making extreme claims in discussions of privacy 
>>> and related public policy, and with so little understanding of the 
>>> underlying economics, it is important to identify the fundamental 
>>> forces clearly, they conclude.
>>> "Both sides of the e-commerce privacy debate have overstated their 
>>> cases," they say.
>>> While failing to come to any definitive conclusions about whether 
>>> one can identify conditions under which public policy should or 
>>> should not promote privacy, they authors conclude that the 
>>> assignment of privacy rights to personally identifiable information 
>>> may have no effect on agents' equilibrium welfare levels and need 
>>> not lead to an efficient equilibrium privacy level.
>>> "In some situations, the only effective policy would be explicitly 
>>> to block the dissemination or use of such information. Public policy 
>>> could block dissemination in several ways. One is to make it illegal 
>>> to reveal personally identifiable data. Another is to destroy 
>>> employment or prison records or other forms of tangible evidence, 
>>> which would prevent households from credibly revealing the 
>>> information even if they chose to do so. A related policy would be 
>>> to refuse to enforce sanctions against people who lie about their 
>>> protected characteristics," they conclude.
>>> -- 
>>> Regards
>>> brd
>>> Bernard Robertson-Dunn
>>> Sydney Australia
>>> brd at iimetro.com.au
>>> _______________________________________________
>>> Link mailing list
>>> Link at mailman.anu.edu.au
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