Back in 2000, Stephen King tried something new in selling a novel, The Plant. He decided to offer it exclusively online — in digital format — knowing that there was effectively no protection against copying. Of course, King was well aware that selfishness may be against him and so decided to offer his book in installments. …
Continue reading "Pay what you want experiments. From Stephen King to Kickstarter"
Last year I had the pleasure of presenting a seminar at Yahoo Research. One of the things that interested me about that part of Yahoo was the fact that it had, in my field of economics, made some very significant hires from academia. In a time where some academically oriented labs had fallen aside, Yahoo …
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 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 …
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 …
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 …
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 …
Continue reading "Facebook is the largest news organization ever"
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 …
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 …
Continue reading "Antitrust and Apple's iPad Subscription Pricing"
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 …
Continue reading "The Present and Future of Digital Publishing"
Digitopoly 