[MyData & Open Data] Economic signalling, open data, my data, and privacy unraveling

Fri Apr 11 13:44:03 UTC 2014

Hi all,

I'd like to raise another issue here related to the role of individual
choice in making data public.  In this paper by Scott Peppet

Unraveling Privacy: The Personal Prospectus & the Threat of a Full
Disclosure Future
http://www.scottpeppet.com/2012/04/unraveling-privacy/

Peppet argues that by choosing to make our data public, we are forcing an
implied choice on others who don't, about which people will make
assumptions.  He gives the example of an orange seller.

"The classic example of unraveling imagines a buyer inspecting a  crate of
oranges.  The quantity of oranges in the crate is unknown and opening the
crate before purchase is unwise because the oranges will rot before
transport. There are stiff penalties for lying, but no duty on the part of
the seller to disclose the number of oranges in the crate. The number of
oranges will be easy to verify once the crate is delivered and opened. The
buyer believes that there can't be more than one hundred oranges.

The unraveling effect posits that all sellers will fully disclose the
number of oranges in the crate, regardless of how many their crate
contains. Begin with the choice faced by a seller with one hundred oranges
in his crate. If the seller stays silent, the buyer will assume there are
fewer than one hundred oranges and will be unwilling to pay for the full
amount. The seller with one hundred oranges will therefore disclose and
charge full price. Now consider the choice of a seller with ninety nine
oranges. If this seller stays quiet, the buyer will assume that there are
fewer than ninety nine oranges and will discount accordingly. The silent
seller gets pooled with all the lower-value sellers, to his disadvantage.
He will therefore disclose.  And so it goes, until one reaches the seller
with only one orange and the unraveling is complete."

You can imagine this applied to health data, fitness data, driving data,
etc.  He sums it up by saying:

"In a signaling economy, even if individuals have control over their
personal information, that control is itself the undoing of their privacy"

The paper left more questions for me than it answered.  How significant a
factor is signalling?  How can it be weighed against individual freedom of
choice?  This sort of thing already happens with insurance companies.  Is
the risk the same in other realms of open data?  His argument strikes me as
convincing but theoretical, a possible extrapolation of things as they are.
 I'd love to hear other opinions on this paper.

Regards... Steve
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