Data Sharing or Analytics Sharing?

Abstract

Data combination and analytics can generate valuable insights for firms and society as a whole. Firms can seize these opportunities by joining platforms that either allow them to access the data contributed by other firms or provide the result of the analytics performed on such data, depending on whether the platform adopts ''data sharing'' or "analytics sharing" technologies. The former technology enables firms to exploit their data endowment together with the data contributed by others, whereas the latter offers advantages in terms of privacy and security by reducing data transmission. We present a model that allows us to study the economic and managerial incentives generated by these technologies for both firms and a platform. First, we find that the platform chooses analytics sharing only when the security advantage of this technology is sufficiently large. Second, we show that analytics sharing results in a higher total data contribution than data sharing under general and reasonable conditions. Third, we determine the optimal data-combination technology from the perspective of consumers and discuss potential misalignments between the platform's and consumers' preferred technology. Our findings carry relevant policy and managerial implications, offering a pathway to enhance both data provision and security.

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Reference

Bruno Carballa-Smichowski, Yassine Lefouili, Andrea Mantovani, and Carlo Reggiani, “Data Sharing or Analytics Sharing?”, TSE Working Paper, n. 25-1615, February 2025.