[LINK] Professors Call Both Sides Wrong on Privacy

Geoffrey Ramadan gramadan at umd.com.au
Thu Oct 26 23:05:37 AEST 2006

Howard Lowndes wrote:
> Geoff Ramadan wrote:
>> The trouble is, that you cannot run a business (any business 
>> including Government business) with out information.
> ...and that is all the more reason why access to that gathered 
> information has to be tightly constrained.
I agree with this. I suppose the issue is where you draw the line 
between "constrained" and "strangled".

Geoffrey Ramadan
>> 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
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