The value of privacy: optimal strategies for privacy minded agents

Agents often want to protect private information, while at the same acting upon the information. These two desires are in conflict, and this conflict can be modeled in strategic games where the utility not only depends on the expected value of the possible outcomes, but also on the information properties of the strategy an agent uses. In this paper we define two such games using the information theory concepts of entropy and relative entropy. For both games we compute optimal response strategies and establish the existence of Nash equilibria.

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