# Selling Data to a Competitor (Extended Abstract)

arXiv: https://arxiv.org/abs/2307.05078 · HTML: https://mlsanity.com/paper/2307.05078/

## Key facts

- Cited by 1 papers in the map (data through 14 Oct 2026).
- First posted on arXiv 11 Jul 2023.

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

- [Data Sharing with a Generative AI Competitor](https://mlsanity.com/paper/2505.12386/) (2025)

## Abstract (arXiv)

We study the costs and benefits of selling data to a competitor. Although selling all consumers' data may decrease total firm profits, there exist other selling mechanisms -- in which only some consumers' data is sold -- that render both firms better off. We identify the profit-maximizing mechanism, and show that the benefit to firms comes at a cost to consumers. We then construct Pareto-improving mechanisms, in which each consumers' welfare, as well as both firms' profits, increase. Finally, we show that consumer opt-in can serve as an instrument to induce firms to choose a Pareto-improving mechanism over a profit-maximizing one.