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That's a really good scenario that shows the potential risks of a lack of privacy, without being susceptible to "just don't have anything to hide". Thanks for sharing, I'll have to remember that.

I think we're arguing about semantics here. I can see a valid reason for giving away my information if I know it will be used responsibly. I would like to let Google have my information if it helps turns my phone into a better assistant. I would like to extend segments of this information (namely location) to Uber and Lyft so that I can get rides easier. I would NOT like Google to sell my information to third parties that I have not agreed to, and this extends to Uber and Lyft as well. I want to choose which services get to use my data, and I want there to be consequences if those services leak my data.

Now you may say that you can't trust corporations with this responsibility, but what if there WAS something we could do to enforce that responsibility? How much control I have over my information should be left up to me, and it would be great if an entity I trust could enforce that. As of this moment, we don't have that option. However, it doesn't mean that such a future is impossible. If we argue about it enough, maybe the technology and the courts can find a way to make it happen.

If you have knowledge and control over who gets your information and how they use, well that's effectively the definition of good privacy.

But you don't. You have only control over the former. History has shown us time and time again you don't have control over the latter.

How do you have control over the former?

Data is being gleamed about you even if you aren't using their products, and it's being used by companies you haven't authorized all the time.

Our legal structure needs to catch up and punish companies who use data that we did not authorize. Data should be seen as personal property.

That will never meaningfully happen, because it is contrary to third party doctrine and would make it impossible to do business with people.

If you tell me that you like bananas, and I bring you bananas, I'm not being unethical. The problem with online services is that you're baring your soul to the eye of sauron without realizing what it means. The only way to win is not to play.

You may want to look into the EU GDPR, which requires all companies to strictly manage all personal information, or face a penalty of up to 5% of worldwide turnover.

This is set to activate in a year, and it is a huge problem for software used in the EU because almost nobody is ready for it.

https://en.m.wikipedia.org/wiki/General_Data_Protection_Regu...

I didn't say complete control. That's... well... not actually possible (ever, since time began really, if someone can see you they can track data about you).

But you can have reasonable control of it and you can't with the latter.

I would extremely argue the term reasonable.

I agree. My point is that it doesn't make sense to say "I'm not really concerned with privacy issues, I give lots of personal data to several services and it improves my life." Because that's effectively saying "I'm not concerned with privacy issues as long as my privacy is really good."

>But generally speaking, we take advantage of information asymmetry all the time:

Sure we do. But this is generally regarded as a bad thing and indicative of a failure in our commercial system to engender fair outcomes. Informational asymmetries aren't things we should be actively involved in exacerbating.

I think that's just something we tell each other so the children can sleep at night.

Of course we exacerbate information asymmetries. That's what we do. That's why the neanderthals are in our museums, instead of the other way around.

Saying we shouldn't is like saying birds shouldn't fly, because it's not fair to the fish.

There's a difference between survival and luxuries (like a trip to Paris). Ethics and politics should be about finding the boundaries between those things, and try to provide the basics (shelter, education, privacy) and let people try to make not 100% fair businesses out of the other things.

If it's so ethical, why "provide" and "let"? Can't you trust people to do the right thing?

If not, how do you know it is in fact the right thing?

If you prescribe and enforce your ethics, I think you're wandering close to another definition of politics.

Because there are people with behavior that do not conform to the agreed upon norms.

My ethics? I never said mine.

And yes, there are inherent dangers (like tyranny of the majority), but there are trivial ethical issues where there is no good solution for allowing the [or any] minority to self-determine. (Like rules regarding sex with children, just to throw in the classic think of the children. But of course the age of consent is not a magical line somehow creating an overnight transformative event for every resident of that state.)

You make a good point about the pricing asymmetry.

But the point remains that most people are voluntarily, enthusiastically, giving up personal data in exchange for features that they find valuable.

It's hard to see that as a privacy issue.

Being part of the world involves being known. In the proverbial "olde days," when people lived in much smaller communities, everyone knew everyone's business.

Government spying on its own citizens is more problematic. But again, being a citizen, by definition, means aspects of an individual's life are known, and are public data.

This notion of "privacy" is a special, legal, construct. It's meaning in everyday language is provisional.

What is more problematic, IMO, is the excessive use of classification by the Federal Government. This practice is vulnerable to abuse, as it enables legally enforced secrecy to cover up misconduct.

Well, according to a study conducted a few years ago, most people actually doesn't give up their information enthusiastically.

https://techcrunch.com/2015/06/06/the-online-privacy-lie-is-...

I'd say its voluntary in the same way a frog is voluntarily boiling itself.

> But the point remains that most people are voluntarily, enthusiastically, giving up personal data in exchange for features that they find valuable

No, that's demonstrably false. Most people have no idea how exactly they are tracked and what information is being collected about them. How would they? It's not always as simple as "Uhh, so I guess if I write an email in Gmail Google can see my email?!" And even then, I think the majority don't actually think that Google does that. "I mean, email is private is it not?!" - is what some people likely think.

Do you actually think that most people know that Facebook and Google track them across the web and know most of the sites they visit when they aren't even on Google or Facebook's websites, through Google Analytics code and the Like button (without having to press on it)?

How long before the technology and bandwidth becomes advanced enough that it's actually possible to capture all conversations from mics 24/7 of the people around a device, and store it for analysis in the cloud? Do you think people expect that to happen right now, or are "enthusiastic" about it? No, they don't and aren't.

In fact some call this idea a "conspiracy theory." But ten years from now we'll probably discover Facebook or Amazon has already been doing it for a few years, and a few more years later the privacy invasion apoligists will start saying "well yeah, of course they listen to your microphone, that's why it's there! To analyze your context and give you even more targeted products and ads!"

Companies first abuse new ways to track people (I guess they would call that "innovation"), and maybe 10 years later, regulators catch-up to it and force them to pull-back their tracking a little bit, after the information has long been stored and used in their databases.

Are we imagining a future where sellers can track our every want but consumers lose the ability to shop around? Why wouldn't market forces and competition protect us from this?

To maximise profit, a corporation must find the highest possible price that customers are still willing to pay. If a company finds a way to do this separately for each customer, then the other market players need to follow, otherwise they will loose their capital (i.e. shareholders jump ship). Information asymmetry is a very devious market hazard, it makes it such that the market appeara to be working perfectly well, but from the consumer point of view it appears like fraud. Nothing you can do other than protecting your data.

Companies sell at lower prices than the maximum acceptable price of the customer all the time for a variety of reasons. In order for what you say to be true there has to be a monopoly - otherwise competition will drive prices below that point (and this happens all the time)

There doesn't have to be an absolute monopoly, just a monopoly to a very specific service that you are looking for. Like a direct flight on a less frequented route. Or a delivery of baby wipes that arrives until tomorrow lunchtime at your home address. Oh, you also searched for "what to do when out of baby wipes"? Better jack up that price then...

Monopolistic behavior. Lots of products can only be bought from a couple of companies. Competition need not apply.

Even in a competitive market place they can collectively decide to overcharge the same customers.

Because of companies like Amazon. Most specialized shops in many countries have died because they can't compete with Amazon's leverage and scale, and it will only get worse.

This already happens and has been going on for a decade. https://www.theguardian.com/money/blog/2010/aug/07/computer-...

As an aside, you should try checking airfares in incognito mode to ensure this is not happening. Even refreshing the page for the same fare can affect the pricing model.

Afaik Amazon already does that with book pricing, or did.

You say "overpay" but if the user pays for it then that would have been an efficient price - making the entire transaction beneficial.

Economically it would be the market clearing price so would be beneficial to the market generally. Sounds like a great thing.

Suppose a company invented an aids vaccine, and then charged gay folks and injection drug users 20x, because of hey - those at higher risk are willing to pay more for protection would that be a great thing?

Or let's go back to the Paris example. If everyone is paying the most they can afford, that leaves less money on the table for restaurants, cheese and wine when actually in Paris. It's 'great' if you only look at the market dynamics of flights and ignore the economic/social benefits of cheap travel.

Depends on whether you believe healthcare should be treated the same as other products in the marketplace, or if you think they are a public good.

I am trying to understand what you mean by "public good". It's not the formal economics meaning (https://en.wikipedia.org/wiki/Public_good), because healthcare clearly is excludable and rivalrous.

The notion of a "public good" also isn't about how things should be treated, but more about how things necessarily are.

It sort of seems you're making an argument unrelated to economics here, even though it's using words also used in the jargon of economists.

Nope, I'm using exactly as intended.

If one is to believe that healthcare products should be subject to market forces, then their prices should be variable in the same way other products are. In which case the answer to the question is, yes someone with a "niche" health problem would pay a substantially high price.

If however one believes that healthcare should not be subject to market forces, that is, it should be available to all equally (non-excludable) and cannot incur asymmetric costs between users (non-rival) then the answer is no, it would not be good.

The important thing about public goods is, you can't exclude them if you tried. By saying we should pretend that healthcare is a public good, you are saying we have a choice in the matter. This on face makes it a non public good.

This is a fine opinion to have, but you do yourself no favors by misusing jargon like this.

The problem with healthcare is that it's often not negotiable. Let's say you're a billionaire in a world with zero privacy. You get cancer. One company owns the patent on the drug you need to survive. Is it okay for them to charge you a billion dollars for treatment?

Wouldn't that price be the consumer surplus price (above the market clearing price)? And wouldn't that transaction have been a result from an inefficiency in the market (lack of perfect information)?

Genuinely wondering. My economics is a bit rusty so not sure if what I said is remotely valid

Actually, no. Such price isn't "efficient" because of how efficient markets are defined [1]: "...prices fully reflect all available information." But in this case one of the market participants (you) are not aware that others are getting a better deal.

In fact, this would lead to widespread pricing discrimination [2] based on what they learned (or bought) about you. Imagine seeing 20% markup on virtually everything available to you online, because every retailer can see your higher-than-average income before their page loads in your browser.

Personalized content (which everyone seems to love) is just an inch away from personalized pricing.

[1] https://en.wikipedia.org/wiki/Efficient-market_hypothesis

[2] https://en.wikipedia.org/wiki/Price_discrimination

Yes, note the all available information.

It's not perfectly efficient because there isn't perfect information, however it's more efficient than it otherwise would be.

More information in the system = greater efficiency.

> More information in the system = greater efficiency.

More information does not always increase market efficiency. In fact, it can have just the opposite effect when there is information asymmetry.

https://en.wikipedia.org/wiki/Information_asymmetry

http://www.economicsonline.co.uk/Market_failures/Information...

For sure, but only in the short term. History shows that there is a push and pull here and that on aggregate more information is being input to the market from all sides and available for price discrimination. Inefficiencies are great for enterprises to attempt to capture, and by doing so exposing the inefficiency.

> You say "overpay" but if the user pays for it then that would have been an efficient price

This says nothing of the possibility that one party has a lot of information, and the other party has relatively little information, and the guy with very little information is getting screwed.

The implicit assumption is that the service is charging your air fare or whatever based on your ability to pay. So in that sense, in aggregate, it drives equilibrium between supply and demand - and thus is comprised of market clearing prices, as I said.

Market clearing prices can strongly favor one party or another, depending on the information asymmetries present.

There is a difference between competitive single price and monopolistic pricing.

In fact, in a monopolistic market, perfect price discrimination (every consumer pays exactly their individual marginal utility) results in allocative efficiency.

The consumer surplus is zero, but the producer surplus is the maximum possible value.

In other words, the monopolistic supplier would otherwise charge a higher price for everyone if it is unable to price discriminate. If price discrimination is successful, more consumers can afford the product.