Competition in the Digital Age
[This post was co-written with Ajay Agrawal and Avi Goldfarb and appeared in HBR.org on 17 November 2016] The year 1995 was heralded as the beginning of the “New Economy.” Digital communication was set to upend markets and change everything. But economists by and large didn’t buy into the hype. It wasn’t that we didn’t recognize …
Continue reading "The Simple Economics of Machine Intelligence"
[A later, edited version of this appeared in the Wall Street Journal, 26 October 2016 under the title "Newspapers are social media"] Digitization exposes weak links. Then it breaks them. So much so that it makes you wonder what people were thinking in the first place. And, according to Harvard Business School professor, Bharat Anand in …
Tim Harford is the finest expositor of economic ideas today. That is a view I have held for a long time. While his first few books stayed within the economic view of puzzles his last two have moved beyond that tradition. Adapt looked at how failure breeds innovation. And now he has produced Messy a …
... at least for cars. Uber is well-known for having pushed autonomous vehicles. And when it first floated the idea, somewhat bemused onlookers wondered how this fit with their short-term goals of attracting drivers. But when Uber set up a major R&D facility in Pittsburgh -- gutting Carnegie Mellon's computer science department -- it seemed …
Continue reading "Neither Uber nor Lyft believe sharing is the future"
Why do people buy books? If this were Family Feud, survey says: to be read. But in the real world, I have never found that convincing. To be sure, books get read but if you consider the life of a book, most of the time it is sitting on a shelf. Moreover, it is rarely …
It has been hard to find good books that deal with the digital economy -- especially in terms of microeconomics and strategy. The classic -- Information Rules -- is now almost two decades old. It holds up remarkably well but there is some embarrassment in still recommending it to students. With their new book -- …
[This post was originally published on HBR Blogs on 25 July 2016] Last week Elon Musk released the second installment of Tesla’s Master Plan. The first installment had been written in 2006. It outlined Tesla’s automotive strategy and it has been pretty much followed to the letter. The second installment moves Tesla beyond the traditional …
Apple announced two major changes to the App Store for its various software platforms (iPhone, iPad and OSX). The first would be to allow search based advertising. The second would be to reform subscription pricing. These are large changes as I will explain below. Search-based Advertising A little appreciated fact is that apps themselves have …
We don't speak of it very often but economists face a fundamental challenge with respect to innovation: if innovation is something no one has anticipated, then the (Savage) axoims upon which we base our rational choice decision-making cannot apply. Let me explain. Decision-making is all about actions and their consequences. Leonard Savage created the framework …
Continue reading "Adult Colouring Books Remind us that Innovation lies outside economics"
Emma Jacobs has a nice review of The Disruption Dilemma in the Financial Times. It is always pleasing to read that "[t]his is an interesting and well-written, pithy book dealing with one of the buzziest concepts in business." However, right at the end, she took issue with one thing: However, it is strange that Gans …
Digitopoly 