Persuasion through selective disclosure: implications for marketing, campaigning, and privacy regulation

This paper introduces a modeling framework to study selective disclosure of information by firms or political campaigners (senders), based on the personal information that they acquire about the preferences and orientations of consumers and voters (receivers). We derive positive and normative implications depending on: the extent of competition among senders, whether receivers are wary of senders collecting personalized data, and whether firms are able to personalize prices. We show how both senders and receivers can benefit from selective disclosure. Privacy laws requiring senders to obtain consent to acquire personal information that enables such selective disclosure increase receiver welfare if and only if there is little or asymmetric competition among senders, when receivers are unwary, and when firms can price discriminate.