In 1974, hundreds of thousands of Australians with a bank account in good standing received a piece of plastic in the mail: a credit card, known as a Bankcard, launched and operated by a consortium of Australian banks. In one swoop, a payment instrument that had been previously available to only the wealthy in Australia (through …
Al Roth, Market Designer
Al Roth has been doing fascinating work designing matching markets. These include the markets for matching kidney donors and recipients, medical residents to programs, and assigning students to schools. In these markets, small changes in the "rules of the game" can lead to big efficiency gains, and it's not always obvious how to best make those …
The Missing Market for Failure
We are told that some large fraction (possibly 80 percent) of small, entrepreneurial businesses fail. The hard part is working out why. You may notice a restaurant has closed in your neighborhood. If it seemed popular, you wonder if the owner left for greener pastures or there was some hidden health issue no one had …
Is Paul Krugman 'Click Worthy'?
The New York Times has just proposed to turn us all into Seinfeld's Elaine Benes. In episode 119 of the classic sitcom, Elaine's preferred method of contraception is revealed to be the sponge. When the sponge goes off the market, she must come to terms with the fact that whatever stock she had in her possession was it. She could …
Facebook is the largest news organization ever
Upon reading the title of this post I suspect your reaction is, "Really? I didn't even know it was a news organization." And that reaction is precisely why many people look with disbelief at the extraordinary estimates of Facebook's value. Facebook is not some plaything. It is a fully fledged news organization on a scale we have …
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Stagnation or Mismeasurement?
A long, long time ago, in an office not far away, I did some work on the "Productivity Paradox". Recently, the issue has resurfaced in a new way, especially via a new e-book by Tyler Cowen called "The Great Stagnation". Annie Lowrey in Slate discusses Tyler's thesis and quotes me on one counter argument: But revenue is not …
Antitrust and Apple's iPad Subscription Pricing
Consider the following situation. You are a producer of a certain fashion item (maybe, designer jeans). A clothing retailer opens up a store on the highly trafficked, High Street. They would like to stock your jeans but they insist on a low wholesale price even though they will price at full retail to consumers. You …
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The Present and Future of Digital Publishing
Here is what we know about publishing. It is going digital, and that means traditional publishers have to switch their complementors — the term we use to describe firms that do essential things but are not strictly suppliers. Traditional publishers' complementors were printers and distributors. Their new complementors will be whoever can get their digital editions to …
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Technology Review Interview about IT and Innovation
Despite the vast amounts of computing and communication power in corporate hands, companies are at the early stages of using IT to revamp business practices, become more efficient, and drive the next wave of national productivity growth. That's the intro the an interview that David Talbot, Technology Review's chief correspondent, did with Erik Brynjolfsson last week. The first …
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The Consequences of Hiybbprqag’ing
Like so many who watch developments in the tech world, I have been absorbed in the last few days on the ‘Bing Sting’ and precisely what it means. The debate is quite passionate. Following the initial story from SearchEngineLand by Danny Sullivan that documented Google’s identification of how Bing’s search rankings were related to its own, Microsoft responded but …
