Abstract: Exploitation of consumer data allows online retailers to enhance services provided to consumers but at the risk of causing unintended privacy issues. There has been debate about whether to devise regulation policies to restrict data collection and usage by online retailers. This paper studies the implications of newly adopted privacy policies, such as the General Data Protection Regulation (GDPR), for an online retail supply chain comprising a retailer and a supplier. We find that despite the GDPR’s intention to safeguard consumer privacy, it may inadvertently hurt consumer surplus while benefiting the retailer. In fact, the GDPR may lead to an outcome detrimental to all parties involved, including the retailer, supplier, and consumers, thereby resulting in a triple-lose situation. Our results hold significant implications for consumers, supply chain firms, and policymakers alike, contributing to the existing literature on evaluating the impact of privacy regulations on technology innovation and adoption.
Biography:
Fuqiang Zhang is the Dan Broida professor of Supply Chain, Operations, and Technology (SCOT) at Olin Business School, Washington University in St. Louis. He also served as the SCOT area chair and associate dean of the MBA programs at Olin. Professor Zhang obtained his Ph.D. in Managerial Science and Applied Economics from the Wharton School, University of Pennsylvania. His research interests focus on supply chain and technology innovation, consumer analytics in operations management, and sustainable operations. In recent years, he has been working on research topics that are driven by empirical data. Professor Zhang’s research has appeared in top-tier academic journals such as Management Science, Manufacturing & Service Operations Management, Operations Research, Marketing Science, and Production and Operations Management.
