Data Privacy as a Prisoner's Dilemma
Good analysis:
Companies would be better off if they all provided meaningful privacy protections for consumers, but privacy is a collective action problem for them: many companies would love to see the ecosystem fixed, but no one wants to put themselves at a competitive disadvantage by imposing unilateral limitations on what they can do with user data.
The solution—and one endorsed by the essay—is a comprehensive privacy law. That reduces the incentive to defect.
Carlo Graziani • July 28, 2011 7:08 AM
Prisoner Dilemma is the wrong game-theoretic model here — no additional defection reward, just compliance penalty.
This is The Tragedy Of The Commons.