Big data׳s impact on privacy, security and consumer welfare

•There are various costs, benefits, and externalities associated with organizations׳ use of big data.•Different characteristics of big data are tightly related to privacy, security and welfare effects.•Privacy, security and welfare effects of big data are likely to vary across consumers of different levels of sophistication, vulnerability and technological savviness.

The purpose of this paper is to highlight the costs, benefits, and externalities associated with organizations׳ use of big data. Specifically, it investigates how various inherent characteristics of big data are related to privacy, security and consumer welfare. The relation between characteristics of big data and privacy, security and consumer welfare issues are examined from the standpoints of data collection, storing, sharing and accessibility. The paper also discusses how privacy, security and welfare effects of big data are likely to vary across consumers of different levels of sophistication, vulnerability and technological savviness.