We study markets for sensitive personal information. An agent wants to communicate with another party but any revealed information can be intercepted and sold to a third party whose reaction harms the agent. The market for information induces an adverse sorting ef-fect, allocating the information to those types of third parties who harm the agent most. In equilibrium, this limits information trans-mission by the agent, but never fully deters it. We also consider agents who naively provide information to the market. Their presence ren-ders traded information more valuable and, thus, harms sophisticated agents by increasing the third party’s demand for information. Half-baked regulatory interventions may hurt naive agents without helping sophisticated agents. Comparing monopoly and oligopoly markets, we find that oligopoly is often better for the agent: it requires a higher value of traded information and therefore has to grant the agent more privacy.

The efficiency ranking of market structures is qualitatively affected by the nature of buyer side peer interactions. To show this, I formulate a model for a two-sided market with competing sellers and a network of buyers whose willing-ness to purchase varies according to their peers ’ purchases. Examples of such markets include competing small businesses, on-line music and video streaming services and publishers in advertisement exchanges. I allow for the joint presence of positive and negative peer influences and define overall positive and overall negative peer influence based on a vector aggregate of the exerted marginal influ-ence on others ’ choices. I show that typical market structures (here competition in prices, competition in fees and price setting by a centralized platform) do not internalize the efficiency distortions caused by the externalities. In particular, with overall positive peer influence competition in membership fees dominates competition in prices while with overall negative peer influence this conclusion reverses. ∗I am particularly grateful to Antonio Penta and Rakesh Vohra. I thank SangMok Lee, Mallesh Pai, Selman Erol, Marzena Rostek, and seminar audiences at University of Pennsylvania for their valuable feedback. This version is a preliminary draft, all errors are mine and feedback is welcome.

A monopolist sells informative experiments to heterogeneous buyers. Buyers differ in their prior information, and hence in their willingness to pay for additional signals. The monopolist can profitably offer a menu of experiments. We show that, even under costless information acquisition and free degrading of information, the optimal menu is quite coarse. The seller offers at most two experiments, and we derive conditions under which flat vs. discriminatory pricing is optimal.