Paying with your information: The efficiency-enhancing effects of data provision

Internet services are often free of charge, but ask for customers’ personal data in exchange for usage. We experimentally study whether the provision of information-based public goods is susceptible to restraint when contributions not only make contributors better off, but also enable a non-contributing “big player” to acquire substantial profits. We show that the presence of the big player crowds out the willingness to provide money, but no such effect is observed for information. Hence, collecting anonymized personal data instead of monetary fees can be more profitable to service providers and create greater benefits for customers.