Emerging Markets for RFID Traces

Abstract

RFID tags are held to become ubiquitous in logistics in the near future, and item-level tagging will pave the way for Ubiquitous Computing, for example in application fields like smart homes. Our paper addresses the value and the production cost of information that can be gathered by observing these tags over time and different locations. We argue that RFID technology will induce a thriving market for such information, resulting in easy data access for analysts to infer business intelligence and individual profiles of unusually high detail. Understanding these information markets is important for many reasons: They represent new business opportunities, and market players need to be aware of their roles in these markets. Policy makers need to confirm that the market structure will not negatively affect overall welfare. Finally, though we are not addressing the complex issue of privacy, we are convinced that market forces will have a significant impact on the effectiveness of deployed security enhancements to RFID technology. In this paper we take a few first steps into a relatively new field of economic research and conclude with a list of research problems that promise deeper insights into the matter.