Title: Market solutions to privacy problems?
Description: Solutions to privacy problems tend to evolve slowly within a culture, as matters of custom and civility policed by social sanction. The rapid growth of electronic media, databases and telemarketing systems has posed a shock to this good order, particularly but by no means exclusively with respect to privacy in medical matters, and many regulatory initiatives have been mounted. Yet regulatory solutions routinely disappoint. Market solutions are usually no better, because abusers are easily masked against reputation effects. How can privacy be assured? This question is analyzed by showing that privacy has the features of both a right and an asset, and that gains in privacy inevitably come at the cost of identity. A solution is proposed in which a market infrastructure is built on a limited regulatory foundation. The solution creates institutions to allow individuals to capture a share of the value of their identity assets and that impose reputation consequences on violators of their presumed privacy rights.