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Friday Seminar - "Cookies and Shopping" - Michaela Pagel (Columbia Business School)

Michaela Pagel, Roderick H. Cushman Associate Professor of Business at Columbia Business School, will present her research at SSE main building (Room A720) on Friday, November 10 at 10:30 CET.

"Cookies and Shopping"

Abstract: This study examines the impact of enhanced data privacy standards on online shopping. Specifically, we analyze the staggered adoption of cookie permission and compliance systems by US retailers in response to the European Union’s data protection standards and the California Privacy Act. We combine information on when specific retailers implemented a cookie compliance system with individual-level bank and credit card transactions data from a US data aggregation and analytics provider. We find that online shopping at certain retailers, relative to offline spending, decreases significantly after those retailers introduce cookie compliance systems. To address potential selection into who and when individuals shop with enhanced privacy, we also use exposure to cookie compliance systems, based on pre-policy shopping baskets, in a reduced form IV specification. Our IV specification results confirm the initial findings with respect to spending and show that individuals incur less overdraft fees and roll over less credit card debt, when they shop with enhanced privacy. We discuss targeted advertising and third-degree price discrimination as the main explanations behind these results. Our findings provide insights into the relationship between data privacy regulations and consumer actions, informing policy considerations at the state and federal levels.

Read the paper

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