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18 Minn. J.L. Sci. & Tech. 517 (2017)
The Dynamic Effect of Information Privacy Law

handle is hein.journals/mipr18 and id is 535 raw text is: 

The Dynamic Effect of Information
Privacy Law

Ignacio   N.  Cofone*

    Discussions of information privacy typically rely on the idea
that  there is a tradeoff between  privacy and  availability of
information. But privacy, under some circumstances, can lead to
creation of more  information. In  this article, I identify such
circumstances  by exploring  the ex ante  incentives created by
entitlements  to personal data  and  evaluating  the long-term
effects of privacy.  In  so doing,  I  introduce an   economic
justification of information privacy law.
     Under  the standard law  & economics  account, as long as
property rights are defined and transaction costs are low, initial
right allocations should  be irrelevant for social welfare. But
initial allocations matter when either of these two conditions is
absent. Allocations also matter for production of goods that do
not yet  exist. Personal information has  these characteristics.
While the costs of disseminating information are low, transaction
costs to transfer an entitlement over  it are not. In addition,
availability of information  requires disclosure-and   thereby
imposes  costs. This analysis challenges the traditional economic
objection to information privacy and provides a new justification
for privacy rules by casting them as entitlements over personal
     The approach I develop here provides a framework to identify
which  types of information ought to be protected and how privacy
law should protect them. To do so, it analyzes the placement and

C 2017 Ignacio N. Cofone
    *  J.S.D. candidate and Resident Fellow, Yale Law School, Information
Society Project. Contact: ignacio.cofone@yale.edu. Many thanks to BJ Ard,
Bertrand Crettez, Klaus Heine, Al Klevorick, Jake Miller, Stephan Michel, Rosa
Po, Bibi Van den Bergh, Ann-Sophie Vandenberghe, and Ari Waldman for their
invaluable comments to earlier drafts. I am also grateful to the participants of
the Internet Law Works in Progress Conference (New York, 2016) for their
useful feedback.

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