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Technology, Terrorism, and the Fishbowl Effect: An Economic Analysis of Surveillance and Searches



The dual forces of terrorism and technology have eroded our understanding of privacy, confronting us with the difficult question, “What balance should we strike between privacy and public safety?” This paper offers an economic framework for analyzing when and to what degree privacy should be protected. It starts from the observation that surveillance can prevent and deter harm but creates disutility from loss of privacy, social costs from avoidance, defensive costs spent on protecting privacy, and administrative costs. The framework has several implications for law governing surveillance and searches. Specifically, with respect to Fourth Amendment doctrine, the framework suggests that courts should adopt different standards of scrutiny, engage in forum-based analysis, and give greater protection to hybrid rights involving speech and privacy.