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Information Design for Differential Privacy

Author

Listed:
  • Ian M. Schmutte
  • Nathan Yoder
Abstract
Firms and statistical agencies must protect the privacy of the individuals whose data they collect, analyze, and publish. Increasingly, these organizations do so by using publication mechanisms that satisfy differential privacy. We consider the problem of choosing such a mechanism so as to maximize the value of its output to end users. We show that mechanisms which add noise to the statistic of interest--like most of those used in practice--are generally not optimal when the statistic is a sum or average of magnitude data (e.g., income). However, we also show that adding noise is always optimal when the statistic is a count of data entries with a certain characteristic, and the underlying database is drawn from a symmetric distribution (e.g., if individuals' data are i.i.d.). When, in addition, data users have supermodular payoffs, we show that the simple geometric mechanism is always optimal by using a novel comparative static that ranks information structures according to their usefulness in supermodular decision problems.

Suggested Citation

  • Ian M. Schmutte & Nathan Yoder, 2022. "Information Design for Differential Privacy," Papers 2202.05452, arXiv.org, revised Jul 2024.
  • Handle: RePEc:arx:papers:2202.05452
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    References listed on IDEAS

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    Cited by:

    1. Kai Hao Yang & Philipp Strack, 2023. "Privacy Preserving Signals," Cowles Foundation Discussion Papers 2379, Cowles Foundation for Research in Economics, Yale University.

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