scispace - formally typeset
Search or ask a question
Author

Liad Wagman

Bio: Liad Wagman is an academic researcher from Illinois Institute of Technology. The author has contributed to research in topics: Price discrimination & Competition (economics). The author has an hindex of 15, co-authored 55 publications receiving 1544 citations. Previous affiliations of Liad Wagman include Duke University & Northwestern University.


Papers
More filters
Journal ArticleDOI
TL;DR: The authors summarizes and draws connections among diverse streams of theoretical and empirical research on the economics of privacy, focusing on the economic value and consequences of protecting and disclosing personal information, and on consumers' understanding and decisions regarding the tradeoffs associated with the privacy and the sharing of personal data.
Abstract: This article summarizes and draws connections among diverse streams of theoretical and empirical research on the economics of privacy. We focus on the economic value and consequences of protecting and disclosing personal information, and on consumers' understanding and decisions regarding the trade-offs associated with the privacy and the sharing of personal data. We highlight how the economic analysis of privacy evolved over time, as advancements in information technology raised increasingly nuanced and complex issues associated with the protection and sharing of personal information. We find and highlight three themes that connect diverse insights from the literature. First, characterizing a single unifying economic theory of privacy is hard, because privacy issues of economic relevance arise in widely diverse contexts. Second, there are theoretical and empirical situations where the protection of privacy can both enhance, and detract from, individual and societal welfare. Third, in digital economies, consumers' ability to make informed decisions about their privacy is severely hindered, because consumers are often in a position of imperfect or asymmetric information regarding when their data is collected, for what purposes, and with what consequences. We conclude the article by highlighting some of the ongoing issues in the privacy debate of interest to economists.

665 citations

Journal ArticleDOI
TL;DR: The authors summarizes and draws connections among diverse streams of theoretical and empirical research on the economics of privacy, focusing on the economic value and consequences of protecting and disclosing personal information, and on consumers' understanding and decisions regarding the tradeoffs associated with the privacy and the sharing of personal data.
Abstract: This article summarizes and draws connections among diverse streams of theoretical and empirical research on the economics of privacy. We focus on the economic value and consequences of protecting and disclosing personal information, and on consumers' understanding and decisions regarding the trade-offs associated with the privacy and the sharing of personal data. We highlight how the economic analysis of privacy evolved over time, as advancements in information technology raised increasingly nuanced and complex issues. We find and highlight three themes that connect diverse insights from the literature. First, characterizing a single unifying economic theory of privacy is hard, because privacy issues of economic relevance arise in widely diverse contexts. Second, there are theoretical and empirical situations where the protection of privacy can both enhance and detract from individual and societal welfare. Third, in digital economies, consumers' ability to make informed decisions about their privacy is severely hindered because consumers are often in a position of imperfect or asymmetric information regarding when their data is collected, for what purposes, and with what consequences. We conclude the article by highlighting some of the ongoing issues in the privacy debate of interest to economists.

509 citations

Journal ArticleDOI
TL;DR: It is shown that if the monopolist or an independent third party controls the cost of anonymity, it often works to the detriment of consumers.
Abstract: When a firm can recognize its previous customers, it may use information about their past purchases to price discriminate. We study a model with a monopolist and a continuum of heterogeneous consumers, where consumers have the ability to maintain their anonymity and avoid being identified as past customers, possibly at a cost. When consumers can freely maintain their anonymity, they all individually choose to do so, which results in the highest profit for the monopolist. Increasing the cost of anonymity can benefit consumers but only up to a point, after which the effect is reversed. We show that if the monopolist or an independent third party controls the cost of anonymity, it often works to the detriment of consumers.

158 citations

Journal ArticleDOI
TL;DR: In this article, the authors characterize the winners and losers from potential privacy regulation in the context of four commonly-used oligopoly models: a linear city model, a circular city model and a vertical differentiation model.

67 citations

Journal ArticleDOI
TL;DR: In this paper, the authors study the information-gathering role of a startup accelerator and consider the accelerator's incentives to choose a portfolio size and disclose information about participating ventures, showing that in a rational-expectations equilibrium, the resultant portfolio size is smaller than the first-best level, consistent with some real-world observations.
Abstract: We study the information-gathering role of a startup accelerator and consider the accelerator’s incentives to choose a portfolio size and disclose information about participating ventures. We show that in a rational-expectations equilibrium, the resultant portfolio size is smaller than the first-best (efficient) level, consistent with some real-world observations. We further show that when some signals are uninformative and the portfolio consists of mostly high-quality ventures, the accelerator may choose to disclose only positive signals (and conceal negative signals) about its portfolio firms — a strategy we refer to as partial disclosure. Moreover, coupled with pursuing this strategy of partial disclosure, we demonstrate that the accelerator may possess incentives to exit its portfolio firms early.

49 citations


Cited by
More filters
Book
01 Jan 2008
TL;DR: Nonaka and Takeuchi as discussed by the authors argue that there are two types of knowledge: explicit knowledge, contained in manuals and procedures, and tacit knowledge, learned only by experience, and communicated only indirectly, through metaphor and analogy.
Abstract: How have Japanese companies become world leaders in the automotive and electronics industries, among others? What is the secret of their success? Two leading Japanese business experts, Ikujiro Nonaka and Hirotaka Takeuchi, are the first to tie the success of Japanese companies to their ability to create new knowledge and use it to produce successful products and technologies. In The Knowledge-Creating Company, Nonaka and Takeuchi provide an inside look at how Japanese companies go about creating this new knowledge organizationally. The authors point out that there are two types of knowledge: explicit knowledge, contained in manuals and procedures, and tacit knowledge, learned only by experience, and communicated only indirectly, through metaphor and analogy. U.S. managers focus on explicit knowledge. The Japanese, on the other hand, focus on tacit knowledge. And this, the authors argue, is the key to their success--the Japanese have learned how to transform tacit into explicit knowledge. To explain how this is done--and illuminate Japanese business practices as they do so--the authors range from Greek philosophy to Zen Buddhism, from classical economists to modern management gurus, illustrating the theory of organizational knowledge creation with case studies drawn from such firms as Honda, Canon, Matsushita, NEC, Nissan, 3M, GE, and even the U.S. Marines. For instance, using Matsushita's development of the Home Bakery (the world's first fully automated bread-baking machine for home use), they show how tacit knowledge can be converted to explicit knowledge: when the designers couldn't perfect the dough kneading mechanism, a software programmer apprenticed herself withthe master baker at Osaka International Hotel, gained a tacit understanding of kneading, and then conveyed this information to the engineers. In addition, the authors show that, to create knowledge, the best management style is neither top-down nor bottom-up, but rather what they call "middle-up-down," in which the middle managers form a bridge between the ideals of top management and the chaotic realities of the frontline. As we make the turn into the 21st century, a new society is emerging. Peter Drucker calls it the "knowledge society," one that is drastically different from the "industrial society," and one in which acquiring and applying knowledge will become key competitive factors. Nonaka and Takeuchi go a step further, arguing that creating knowledge will become the key to sustaining a competitive advantage in the future. Because the competitive environment and customer preferences changes constantly, knowledge perishes quickly. With The Knowledge-Creating Company, managers have at their fingertips years of insight from Japanese firms that reveal how to create knowledge continuously, and how to exploit it to make successful new products, services, and systems.

3,668 citations

Journal ArticleDOI
TL;DR: This article showed that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the rise in U.S. household leverage from 2002 to 2006 and increase in defaults from 2006 to 2008.
Abstract: Using individual-level data on homeowner debt and defaults from 1997 to 2008, we show that borrowing against the increase in home equity by existing homeowners is responsible for a significant fraction of both the rise in U.S. household leverage from 2002 to 2006 and the increase in defaults from 2006 to 2008. Employing land topology-based housing supply elasticity as an instrument for house price growth, we estimate that the average homeowner extracts 25 cents for every dollar increase in home equity. Home equity-based borrowing is stronger for younger households, households with low credit scores, and households with high initial credit card utilization rates. Money extracted from increased home equity is not used to purchase new real estate or pay down high credit card balances, which suggests that borrowed funds may be used for real outlays. Lower credit quality households living in high house price appreciation areas experience a relative decline in default rates from 2002 to 2006 as they borrow heavily against their home equity, but experience very high default rates from 2006 to 2008. Our conservative estimates suggest that home equity-based borrowing added $1.25 trillion in household debt, and accounts for at least 39% of new defaults from 2006 to 2008.

997 citations

Posted Content
TL;DR: In this paper, the authors present the design principles and properties of Bitcoin for a non-technical audience, reviews its past, present and future uses, and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and real economy.
Abstract: Bitcoin is an online communication protocol that facilitates virtual currency including electronic payments. Since its inception in 2009 by an anonymous group of developers, Bitcoin has served tens of millions of transactions with total dollar value in the billions. Users have been drawn to Bitcoin for its decentralization, intentionally relying on no single server or set of servers to store transactions and also avoiding any single party that can ban certain participants or certain types of transactions. Bitcoin is of interest to economists in part for its potential to disrupt existing payment systems and perhaps monetary systems, and also for the wealth of data it provides about agents’ behavior and about the Bitcoin system itself. This article presents the platform’s design principles and properties for a non-technical audience, reviews its past, present and future uses, and points out risks and regulatory issues as Bitcoin interacts with the conventional financial system and the real economy.

927 citations

Journal ArticleDOI
TL;DR: The Bitcoin protocol as mentioned in this paper is an online communication protocol that facilitates the use of virtual currency, including electronic payments, and allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history.
Abstract: Bitcoin is an online communication protocol that facilitates the use of a virtual currency, including electronic payments. Bitcoin's rules were designed by engineers with no apparent influence from lawyers or regulators. Bitcoin is built on a transaction log that is distributed across a network of participating computers. It includes mechanisms to reward honest participation, to bootstrap acceptance by early adopters, and to guard against concentrations of power. Bitcoin's design allows for irreversible transactions, a prescribed path of money creation over time, and a public transaction history. Anyone can create a Bitcoin account, without charge and without any centralized vetting procedure—or even a requirement to provide a real name. Collectively, these rules yield a system that is understood to be more flexible, more private, and less amenable to regulatory oversight than other forms of payment—though as we discuss, all these benefits face important limits. Bitcoin is of interest to economis...

882 citations