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.
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)
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.
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)
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