Recently, Dr. Chen Li, Distinguished Research Fellow of our college, in collaboration with Associate Professor Inácio Bó from the University of Macau and Associate Professor Rustamjan Hakimov from the University of Lausanne, Switzerland, published their academic paper entitled "Strategic Responses to Personalized Pricing and Demand for Privacy: An Experiment" in Games and Economic Behavior, the internationally recognized top journal in the field of game theory. Dr. Chen Li served as the corresponding author, and Shanghai International College of Intellectual Property was listed as the first affiliation.
Games and Economic Behavior is widely acknowledged as a leading economics journal in the field of game theory, covering interdisciplinary research areas including economics, political science, biology, computer science, mathematics, and psychology, with significant academic influence.
Abstract:
In recent years, the rapid development of information technology has led to an explosive growth of consumer data. In the era of big data, personalized pricing has become an important tool for companies to optimize profits. For example, airlines and car rental companies have been reported to engage in price discrimination based on consumers' geographic location. Additionally, some e-commerce platforms have also adopted price discrimination strategies based on personal consumer characteristics.
Although consumer awareness of privacy protection has improved and data protection regulations have been successively introduced in various countries and regions, in the complex "big data" environment, consumers often lack sufficient understanding of data collection and usage practices, making it difficult for them to make optimal privacy decisions.
This study employs an experimental approach, designing a set of novel experiments to explore consumers’ strategic behavior when faced with personalized pricing and its impact on privacy demand. By controlling the similarity between collected personal data and the product context, the research finds that participants engage in strategic questionnaire responses to influence prices, with such behavior being more effective when the data is highly relevant to the product. Furthermore, when the similarity between data and product context is low, participants exhibit a reduced demand for privacy and are more prone to making suboptimal privacy choices.
These findings reveal the complex interaction between consumer behavior and privacy protection, emphasizing the importance of strengthening data privacy policies in the era of big data. Even seemingly unrelated personal information can potentially affect product pricing.
Author Profile:
Dr. Chen Li is a Distinguished Research Fellow at Shanghai International College of Intellectual Property, holding a Ph.D. from the Université Libre de Bruxelles (French-speaking), and the European Center for Advanced Research in Economics and Statistics. She previously served at the School of Business, University of Gothenburg, Sweden, and as a visiting scholar at the University of Antwerp, Belgium.
Dr. Chen’s research focuses on market design and innovation economics, covering topics such as matching mechanism design and data privacy. Her work has been published in leading journals in the field of game theory. In recent years, her research interests have further expanded to issues related to intellectual property transactions.
Original Article:
Bó, Inácio, Li Chen, and Rustamdjan Hakimov. "Strategic Responses to Personalized Pricing and Demand for Privacy: An Experiment." Games and Economic Behavior (2024).
