Did the rise of free information technology improve GDP? It is commonly assumed that it did. After all, the Internet has changed the way we work, play, and shop. Smartphones and free apps are ubiquitous. Many forms of advertising moved online quite a while ago and support gazillions of “free” services. Free apps changed leisure long ago—just ask any teenager or any parent …
Economists found something surprising and you won't believe what happened next
Luigi Butera and John List have examined how cooperation is impacted on by uncertainty -- and not just any uncertainty but Knightian uncertainty where outcomes cannot easily be described by a probability distribution. They examine a situation where experimental subjects are contributing to a public good whose returns are uncertain and where individuals may or …
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Technology Policy and the Trump Administration
Technology policy has been a low priority for most voters in presidential elections in the post-war era. The most recent contest was no exception. Arguments about technology policy never made it into campaign commercials, to say the least, nor even a minute of the televised presidential debates. So it goes. Many denizens of the high-tech …
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The Trade-Off Every AI Company Will Make
Co-authored with Ajay Agrawal and Avi Goldfarb [This post appeared in HBR Online on March 28, 2017] It doesn’t take a tremendous amount of training to begin a job as a cashier at McDonald’s. Even on their first day, most new cashiers are good enough. And they improve as they serve more customers. Although a …
Why are peer reviews private?
That is a question raised by the experience of a "rogue" neuroscientist profiled in Wired today: SAM NASTASE WAS taking a break from his lab work to peruse Twitter when he saw a tweet about his manuscript. A PhD in cognitive neuroscience at Dartmouth College, Nastase had sent his research out for review at a …
Ken Arrow: The Greatest
Ken Arrow passed away at the age of 95 yesterday. There will be many who write about his many achievements. Ken won the Nobel prize in 1972 (shared with John Hicks) and was and still is the youngest person to ever win that award. This is all the more amazing since he got a late …
Snapchat chooses execution over control
As Snapchat (SNAP) nears its IPO, analysts have been pouring over its public documents. Ben Thompson found this interesting bit: Our strategy is to invest in product innovation and take risks to improve our camera platform. We do this in an effort to drive user engagement, which we can then monetize through advertising. We use …
Scholarly Publishing and its Discontents
It's 2017 and so it is high time I wrote and released another book. And so here it is. This one is about scholarly publishing and summarises the research of many people including those generously funded by a Sloan Foundation grant into the Economics of Knowledge Contribution and Diffusion. This book isn't for everyone. It …
Exit, Tweets and Loyalty
That is the title of a new paper by Avi Goldfarb, Mara Lederman and myself. In 1970, Albert Hirschman wrote a widely read book, Exit, Voice and Loyalty, whereby he noted that economists relied solely on a particular mechanism -- exit -- to think about how organisations that aren't performing well are disciplined. Don't like …
Congestion on the Last Mile
It has long been recognized that networked services contain weak-link vulnerabilities. That is, the performance of any frontier device depends on the performance of every contributing component and service. This column focuses on one such phenomenon, which goes by the label “congestion.” No, this is not a new type of allergy, but, as with a …
Digitopoly 