The real issue is not privacy as such. It is how information about a person is used.

This new paper by Andrew Odlyzko goes well with Greg Conti's recent article, The Cost of Free Web Tools, from the May/June issue of IEEE Security & Privacy.

Abstract:

This note discusses briefly some questions on economics of privacy, especially the relation of privacy to price discrimination, as well as relevant developments in e-commerce and ordinary commerce. Various open questions that call for further research are discussed. In particular, while much interesting theoretical research has been done, and a small number of informative laboratory experiments have been carried out, much more work would be desirable, especially in some areas of behavioral economics, and there is a great unmet need for active monitoring of the marketplace.