# Price of Privacy in the Keynesian Beauty Contest

arXiv: https://arxiv.org/abs/1905.00844 · HTML: https://mlsanity.com/paper/1905.00844/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 2 May 2019.

## Built on by (most cited first, 1 of 1)

- [Incentivizing Desirable Effort Profiles in Strategic Classification: The Role of Causality and Uncertainty](https://mlsanity.com/paper/2502.06749/) (2025)

## Abstract (arXiv)

The Keynesian Beauty Contest is a classical game in which strategic agents seek to both accurately guess the true state of the world as well as the average action of all agents. We study an augmentation of this game where agents are concerned about revealing their private information and additionally suffer a loss based on how well an observer can infer their private signals. We solve for an equilibrium of this augmented game and quantify the loss of social welfare as a result of agents acting to obscure their private information, which we call the 'price of privacy'. We analyze two versions of this this price: one from the perspective of the agents measuring their diminished ability to coordinate due to acting to obscure their information and another from the perspective of an aggregator whose statistical estimate of the true state of the world is of lower precision due to the agents adding random noise to their actions. We show that these quantities are high when agents care very strongly about protecting their personal information and low when the quality of the signals the agents receive is poor.