Data Brokers Co-Opetition

Data brokers collect, manage, and sell customer data. The authors of the paper presented in this MaCCI/EPoS Virtual IO Seminar propose a simple model, in which data brokers sell data to downstream firms. They characterise the optimal strategy of data brokers and highlight the role played by the data structure for co-opetition. If data are “sub-additive”, with the combined value lower than the sum of the values of the two datasets, data brokers share data and sell them jointly. When data are “additive” or “supra- additive”, with the combined value equal to or greater than the sum of the two datasets, data brokers compete. Results are robust to several extensions.