Abstract

Innovations in web technologies, data warehousing and data mining enable Internet marketers to collect, process and analyze personal data gathered from web users browsing and online purchase habits on a much greater scale as it is now quicker and more economical to do so. Recent surveys indicate that consumers are not comfortable with these practices, especially when the data is collected or sold without their consent. The resulting conflict of interest demands a solution. In this paper, a framework of incomplete markets, property rights and transaction costs is used to analyze the problem and propose some preliminary solutions.