We analyze how a privacy regulation taking the form of a cap on information disclosure affects quality-enhancing innovation incentives by a monopolist—who derives revenues solely from disclosing user data to third parties—and consumer surplus. If the share of privacy-concerned users is sufficiently small, privacy regulation has a negative effect on innovation and may harm users. However, if the share of privacy-concerned users is sufficiently large, privacy regulation has a positive effect on innovation. In this case, there is no trade-off between privacy and innovation and users always benefit from privacy regulation.

中文翻译：

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隐私监管和质量提升创新*

我们分析了以信息披露上限为形式的隐私监管如何影响垄断者（垄断者仅通过向第三方披露用户数据而获得收入）提高质量的创新激励以及消费者剩余。如果关心隐私的用户比例足够小，隐私监管就会对创新产生负面影响，并可能损害用户。然而，如果关注隐私的用户比例足够大，隐私监管就会对创新产生积极的影响。在这种情况下，隐私和创新之间不存在权衡，用户总是受益于隐私监管。