Title: An analysis of dynamic game strategy of privacy protection in personalisation

Authors: Hong-Wei Liu; Li Chen; Hui Zhu; Zhihui Liu

Addresses: Guangdong University of Technology, Yinglong Road, No. 161, Guangdong Province, China ' Guangdong University of Technology, Yinglong Road, No. 161, Guangdong Province, China ' Guangdong University of Technology, Yinglong Road, No. 161, Guangdong Province, China ' Guangdong University of Technology, Yinglong Road, No. 161, Guangdong Province, China

Abstract: E-business enterprises provide personalisation services for customers based on their privacy information. However, customers benefit from personalisation while suffering from privacy loss. The tradeoff between consumers-benefit and corporate earnings are explored when an incumbent adopts privacy protection in a perfect monopoly market. It also found that when the potential entrant entered into the market, the incumbent that adopted privacy protection can maintain a greater market share than one not adopted. Lastly, we extended this paper further and found that a new enterprise entering a market with privacy protection would lose more profit because of the large cost of adopting privacy protection. This means the privacy protection that the incumbent adopted creates a barrier to new entrants.

Keywords: privacy protection; personalisation; dynamic game strategy; privacy preservation; consumer benefits; corporate earnings; perfect monopoly markets; market entry barriers; personalised services.

DOI: 10.1504/IJSTM.2016.077653

International Journal of Services Technology and Management, 2016 Vol.22 No.1/2, pp.31 - 45

Published online: 12 Jul 2016 *

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