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Jan Büchel / Christian Rusche IW-Report No. 33 16. June 2023 Theoretical effects of uncertainty in the evaluation of data

Businesses can benefit from effective data management and data sharing with other businesses. Data recipients can use the data for product or process optimization, for example, and data providers can receive a fee.

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Theoretical effects of uncertainty in the evaluation of data
Jan Büchel / Christian Rusche IW-Report No. 33 16. June 2023

Theoretical effects of uncertainty in the evaluation of data

Study within the project IEDS, funded and supervised by the Federal Ministry of Education and Research (BMBF)

German Economic Institute (IW) German Economic Institute (IW)

Businesses can benefit from effective data management and data sharing with other businesses. Data recipients can use the data for product or process optimization, for example, and data providers can receive a fee.

However, the evaluation of the data is mostly heterogeneous among the companies, since different evaluation methods are used, for example. In some cases, data is not evaluated at all or companies are not (yet) able to manage data efficiently. These possibilities can lead to uncertainties about the value of a data set. The effects this has on the number of transactions is examined using a game-theoretical model. In particular, it can be proven that uncertainty about the data evaluation of the transaction partner prevents economically sensible data sharing in certain constellations. The reason is that a price-proposing data seller demands a price that is too high for some constellations due to the uncertainty. Whereas price-proposing data buyers set a price that is too low. From an individual point of view, buyers and sellers benefit from this because they can increase their expected payout. However, the probability of a transaction decreases, making it more difficult to exploit the full potential of data from an economics perspective.

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Theoretical effects of uncertainty in the evaluation of data
Jan Büchel / Christian Rusche IW-Report No. 33 16. June 2023

Theoretical effects of uncertainty in the evaluation of data

Study within the project IEDS, funded and supervised by the Federal Ministry of Education and Research (BMBF)

German Economic Institute (IW) German Economic Institute (IW)

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Obstacles to Data Sharing – An Outline of Recent Developments with Policy Recommendations
Marc Scheufen IW-Trends No. 2 10. May 2024

Obstacles to Data Sharing – An Outline of Recent Developments with Policy Recommendations

The increasing networking of production processes and the ability of artificial intelligence to analyse ever larger amounts of data offer enormous potential for the German economy. To exploit this potential fully, however, data must be shared.

IW

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*Alexander Cuntz / *Frank Mueller-Langer / *Alessio Muscarnera / *Prince C. Oguguo / Marc Scheufen External Publication 29. April 2024

Open Science as a Means for Development Aid: Fostering Scientific Research and Innovation

Access to prior scientific works and technical information is key to the emergence of new scientific knowledge and innovation (Moser and Biasi 2018, Nagler et al. 2019).

IW

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