Marketing offers arriving via e-mail, telephone, or videophone from companies that failed to carry a digital watermark of authenticity would be blocked by automated filters. But the system would do a lot more, increasing the flow of information about things in which the person had expressed an interest, from bulk dog food to European travel opportunities. The free flow of more accurate information would have other effects throughout the economy. Consider the fact that the interest rates Americans pay on their home mortgages are from one-half to two percentage points lower than those paid by Europeans. The major reason is that American mortgage lenders are allowed to collect extensive information about their borrowers and pass it on when reselling the mortgage in the secondary market.
More information means less risk for the buyer and a more liquid market.
Digital certificates would solidify and expand these advantages. Micropayment technologies are making it possible for a person s interest in a new dishwasher, for example, to be sold over the Internet for a few pennies. And Internet markets are being developed in which software agents negotiate with other software agents to complete such transactions. The great benefit of combining market technologies with individual control of personal information is flexibility. Legislation cannot respond to rapid or frequent changes in personal preferences about privacy but markets can.