Privacy in social networks: economic options for regulation

Abstract

Abstract: The first concept of privacy was provided by Samuel D. Warren and Louis Brandeis in 1890 as "the right to be left alone". At that time, the world was more than a century away from people voluntary disclosing information and sharing data on a large scale via the Internet on social networks such as Facebook. Today, the business model of the major social networks contain a thirst for their users' personal data which threatens user privacy. Information and power asymmetries hinder users from enforcing their privacy preferences. Furthermore, network effects and switching costs tie them to the market leading networks.The dissertation at hand analyses the topic of privacy in social networks from an information systems and economic research viewpoint. It illustrates privacy factors in the social network environment and examines the related dynamics of user privacy. As such, this thesis analyses whether the status quo of privacy in social networks is economically inefficient or leads to inefficiency, and whether governmental regulation is required. Moreover, existing approaches to solve the privacy challenge in social networks business are assessed and the most promising concepts are emphasized