  We examine the implications of consumer privacy when preferences today depend
upon past consumption choices, and consumers shop from different sellers in
each period. Although consumers are ex ante identical, their initial
consumption choices cannot be deterministic. Thus ex post heterogeneity in
preferences arises endogenously. Consumer privacy improves social welfare,
consumer surplus and the profits of the second-period seller, while reducing
the profits of the first period seller, relative to the situation where
consumption choices are observed by the later seller.
