| Information asymmetries between individuals, firms and governments are pervasive in many economic settings. These asymmetries are often seen as a consequence of natural barriers which constrain the observation and sharing of information. But despite improved monitoring technologies, institutional rules which limit informational flows---that is, preserve privacy---persist and strengthen. This thesis uses economic methodology to investigate whether these rules necessarily reduce efficiency, and to ask how they either benefit or harm the actors who provide and gather information.;Chapter 2 examines why economies might endogenously allow agents a degree of privacy, characterized as incomplete monitoring, even when a costless monitoring technology exists. First, the analysis demonstrates that increasing monitoring effectiveness can actually produce ex-post inefficient outcomes. Second, political equilibria are identified where agents vote over the government's ability to monitor. It is shown how voting to limit monitoring effectiveness can benefit some agents, by restraining the government's impulse to redistribute on the basis of information it discovers.;Chapter 3 uses a dynamic contracting model to examine the incentives for an "upstream" principal to keep agents' contract-choices confidential from a downstream principal. Outcomes are characterized when the principals cannot commit to confidentiality or long-term contracts. If agents are farsighted and sufficiently patient, (i) principals seek confidentiality legislation as a commitment device, and (ii) agents fare strictly worse with a confidentiality law. It is shown that overall efficiency can nevertheless be maximized without a confidentiality law, depending on the order in which contracting occurs.;Chapter 4 investigates the impact of consent provisions on economic outcomes, in a model where agents must choose both task-effort for a principal and whether to publicize their eventual task-performance. The principal can decide when consent is obtained: either before or after the agent learns his performance. Equilibria are computed to determine when a principal may prefer to implement a particular "consent-regime", as a second-best tool to elicit effort when agents are permitted to keep their performance hidden. The analysis reveals that when some agents have inherent concerns about releasing information, the timing of consent has real effects on expected performance. |
