Category Archive for: Web/Tech [Return to Main]

Saturday, May 23, 2015

Video: Top Rate of Taxation

Taxing high incomes – a special session discussing recent research on top tax rates in the UK, France and Denmark, and their effects on tax revenues, tax avoidance, labour supply and inequality

Slides for this lecture are available here:

Tuesday, March 03, 2015

'Can Competition Fix Net Non-Neutrality?'

Joshua Gans:

Can competition fix net non-neutrality?: Short answer: it isn’t obvious that it can.
Let me back up a second and explain why I am revisiting this issue again. Tim Harford published an article a few days ago that took his masterful econsplaining skills to the issue of net neutrality. But in providing his characteristically clear exposition, he crystallised where many economists (including Tim) slip up on the issue of whether broadband competition would get rid of net non-neutrality and make net neutrality regulations redundant. ...
The problem here is that we believe that competition is designed to provide consumers with more of what they want. So if your claim is that they want fast and slow lanes to management network traffic, then moving from monopoly to competition won’t stop that from happening. It will likely enhance it even if, at the same time, it delivers lower prices to consumers. Indeed, in my own work (that just appeared in the Journal of Regulatory Economics), I found that it could be a vehicle for that even if net non-neutrality is not just about network management but something more sinister — like content provider hold-up.
The broader argument that I have made many times is that, in fact, solving the main problem with net non-neutrality — content provider hold-up — can be done with net neutrality while using less intrusive pricing schemes and product design to solve network management issues. In other words, I think we can have our cake and eat it too and net neutrality regulation is a good place to start.
On the issue of broadband competition, there is a political economy reason why net neutrality regulations might turn out to be bad for this: they now provide an excuse to allow things like the Comcast-Time Warner merger to proceed on the basis that net neutrality regulations curb a negative effect of that. My argument here is that I am far from convinced that the two things are related. However, I guess we will see if the political economy issues assist the merger’s regulatory chances. As Tim Harford noted, cable company stocks rose after last week’s announcement by the FCC so things are not looking too good on that front.

Thursday, November 29, 2012

'Bring Back Real Competition to the Telecom Industry'

Are you tired of paying too much for low-quality cable, internet, and phone services?:

Bad Connections, by David Cay Johnston, Commentary, NY Times: Since 1974, when the Justice Department sued to break up the Ma Bell phone monopoly, Americans have been told that competition in telecommunications would produce innovation, better service and lower prices.
What we’ve witnessed instead is low-quality service and prices that are higher than a truly competitive market would bring.
After a brief fling with competition, ownership has reconcentrated into a stodgy duopoly of Bell Twins — AT&T and Verizon. ...
The AT&T-DirectTV and Verizon-Bright House-Cox-Comcast-TimeWarner behemoths market what are known as “quad plays”: the phone companies sell mobile services jointly with the “triple play” of Internet, telephone and television connections, which are often provided by supposedly competing cable and satellite companies. And because AT&T’s and Verizon’s own land-based services operate mostly in discrete geographic markets, each cartel rules its domain as a near monopoly.
The result of having such sweeping control of the communications terrain, naturally, is that there is little incentive for either player to lower prices, make improvements to service or significantly invest in new technologies and infrastructure. And that, in turn, leaves American consumers with a major disadvantage compared with their counterparts in the rest of the world. ...
The remedy ... is straightforward: bring back real competition to the telecom industry. The Federal Communications Commission, the Justice Department and lawmakers have long said this is their goal. But absent new rules that promote vigorous competition among telecom companies, it simply won’t happen.
Just as canals and railroads let America grow in the 19th century, and highways and airports did so in the 20th century, the information superhighway is vital for the nation’s economic growth in the 21st. The nation can’t afford to leave its future in the hands of the cartels.

Monday, March 14, 2011

"The Internet and Local Wages: A Puzzle"

This is from a description of new research forthcoming in the American Economic Review, “The Internet and Local Wages: A Puzzle,” by Avi Goldfarb, Chris Forman and Shane Greenstein:

What has the Internet Done for the Economy?, Kellogg Insight: ...There is widespread optimism among media commentators and policy makers that the Internet erases geographic and socioeconomic boundaries. The Death of Distance and The World Is Flat, two books that espouse that rosy view, were bestsellers. But in the early days of the Internet, the income gap between the upper and middle classes actually began to grow. “We thought it was just a very natural question to ask: is the Internet responsible?” Greenstein says.
Misplaced Optimism
The researchers studied trends from 1995 to 2000 in several large sets of data, including the Quarterly Census of Employment and Wages—which gives county-level information on average weekly wages and employment—and the Harte Hanks Market Intelligence Computer Intelligence Technology Database, which holds survey information about how firms use the Internet. In total, the researchers included relevant data for nearly 87,000 private companies with more than 100 employees each. Based on their older work, they focused only on advanced Internet technologies.
Out of about 3,000 counties in the U.S., in only 163 did business adoption of Internet technologies correlate with wage and employment growth, the study found. All of these counties had populations above 150,000 and were in the top quarter of income and education levels before 1995. Between 1995 and 2000, they showed a 28 percent average increase in wages, compared with a 20 percent increase in other counties (Figure 1).

Figure 1. Advanced Internet investment and wage growth by county type.

Why did the Internet make such big waves in these few areas? Greenstein believes the reason was that these areas already had sophisticated companies and the communications infrastructure needed to seize on the Internet’s opportunities. But there are other possibilities. The impact could have been due to a well-known phenomenon called “biased technical change,” which means that new technologies can thrive only in places with skilled workers who know how to use them. Or it could have been because cities brought certain advantages—denser labor markets, better communication, tougher competition—than more remote areas.
“Each one of those explanations is plausible in our data, and probably explains a piece of it. But none of them by themselves can explain the whole story,” Greenstein says. “It’s really a puzzle.” ...

Monday, March 07, 2011

The Spread of Political Rumors

Does the internet promote political rumors?:

Web use doesn't encourage belief in political rumors, but e-mail does, EurekAlert: Despite the fears of some, a new study suggests that use of the internet in general does not make people more likely to believe political rumors.
However, one form of internet communication – e-mail – does seem to have troubling consequences for the spread and belief of rumors. ... People are much more likely to believe false rumors that they receive in e-mails from friends and family. ...

Continue reading "The Spread of Political Rumors" »

Thursday, February 03, 2011

Bing's Conduct Crosses the Line

Shane Greenstein says Bing is behaving legally, but not ethically:

Bing imitates Google: Their conduct crosses a line, by Shane Greenstein, Virulent Word of Mouse: Imitation happens. ... installs a better tool for soliciting comments, and a month later the same feature shows up at the Huffington Post. Chrysler brings out a minivan and within a two product cycles every other auto assembler has one too. Nobody loses sleep over this.
Moreover, the Internet makes monitoring a rival easier, so imitation involves less hassle and far lower costs than it used to. ...
What happened? ... Google’s engineers hypothesized that users of Microsoft Internet Explorer were entering search requests into Google’s search bar and getting results. They speculated that Microsoft began using that data to tweak the Bing search engine. In short, Google’s users and answers were informing Bing’s results.
That hypothesis turned out to be right. Neither party denies it. ... Bing monitors Google by watching users...
In the modern Internet,... there is no longer any privacy for users. Providers want to know as much as they can, and generally the rich suppliers can learn quite a lot about user conduct and preferences. ...
In the offline world, such intimate familiarity with a rival’s users would be uncomfortable. It would seem like an intrusion. Why is it permissible in the online world? Why is there any confusion about this? Why isn’t this cut and dry?
In other words, the transaction between supplier and user is between supplier and user, and nobody else should be able to observe it without permission of both supplier and user. The user alone does not have the right or ability to invite another party to observe all aspects of the transaction.
That is what bothers me about Bing’s behavior. There is nothing wrong with them observing users, but they are doing more than just that. They are observing their rival’s transaction with users. And learning from it. In other contexts that would not be allowed without explicit permission of both parties.
Moreover, one party does not like it in this case, as they claim the transaction with users as something they have a right to govern and keep to themselves. There is some merit in that claim. ...
What happens now?
This looks like a classic high tech standoff. No law is being broken, so nothing can stop Bing from learning from users that go to Google’s search engine. Judging from their remarks, it sounds like they intend to keep on doing just what they are doing.
That makes me sad. The righteous reaction of Microsoft’s management seems tone deaf.
They had a choice to do it differently (and still have this choice). It would have been much more grown up for them to admit the unintended benefit they have gotten by watching their rival interact with their user. It would more ethical to swear they had not intended to benefit from a type of spying on their rival that would be unethical in other contexts. It would have been mature to then declare that they would win in the long run with good hard innovation instead of gaining advantage from this little piece of information.

(There's quite a bit more detail and explanation in the post.)

Thursday, January 06, 2011

"Time to Cut the Cord"

Tim Duy has had enough:

Time To Cut The Cord: I see that Comcast just raised cable prices.  I find it remarkable that cable companies apparently can not see the train wreck ahead.  I figure that I can drop the cable and the phone (who uses a landline anymore?), ugrade to a faster internet connection and still come out ahead nearly $100 a month.
$100 a month will buy more AppleTV rentals than I can watch, especially given the vast amount of free content now available.  Pay a dollar, rent a show commerical free, or watch online for free with limited commerical interruptions.  Skip the middle men of the cable companies. How long do the cable companies think they can last charging people for dozens of channels they never watch?  I don't see how that model survives.
The one challenge I know I will face is sports programming.  But I think I can find plenty of places in town to watch the Ducks play and socialize at the same time. 
Anyone else cutting the cord?  Happy with the decision?

Saturday, June 12, 2010

"The Simple Economics of Broadband Regulation"

Shane Greenstein discusses "The Simple Economics of Broadband Regulation." The discussion (from mid May) comes in response to a court ruling in the Comcast v. FCC case. Here's how the FCC describes the regulatory problems caused by the ruling in the Comcast case:

A month ago, the United States Court of Appeals for the D.C. Circuit issued an opinion...  [in] Comcast v. FCC, the so-called Comcast/BitTorrent case.  The case began in 2007, when Internet users discovered that Comcast was secretly degrading its customers’ lawful use of BitTorrent and other peer-to-peer applications.  In 2008, the FCC issued an order finding Comcast in violation of federal Internet policy as stated in various provisions of the Communications Act and prior Commission decisions.
The D.C. Circuit held that the Commission’s 2008 order lacked a sufficient statutory basis ... because the Commission, in 2002, classified cable modem offerings entirely as “information services” (a category not subject to any specific statutory rules...), it could not, in 2008, enforce ... nondiscrimination and consumer protection principles in the cable modem context. ...
[U]nder Comcast, the FCC’s 2002 classification decision greatly hampers its ability to accomplish a task the Commission unanimously endorsed in 2005:  “ensur[ing] that broadband networks are widely deployed, open, affordable, and accessible to all consumers.” 

The court ruled that the FCC did not have the authority to stop Comcast from limiting the services of applications that flow over its network (i.e. the ruling allowed net non-neutrality). In response, the FCC reclassified the cable carriers so as to reestablish their regulatory authority. What are the economics behind the FCC's response (the original post has quite a bit more detail)?:

The Simple Economics of broadband regulation, bu Shane Greenstein: There is a simple economic rationale behind the FCC’s recent announcement, made last week by Chairman Julius Genachowski, on May 6th.The FCC had to act. The costs of not acting were too great. Here is why. Broadband carriers have strong economic incentives to provide services that compete with the applications of others. Yet, those same broadband carriers carry the data of all those applications. These carriers face what is often called “mixed incentives”, and until recently all carriers were forbidden from acting on them. Genchowski wanted to keep things that way, but an appellate court made that hard to do.
Let me make the issue concrete. Just ask your neighbor what they would think of the following: Would they be angry if Comcast blocked Skype from operating and told all users they had to go through an approved vendor of IP telephony? Would your neighbor be unhappy if Google slowed down when the search concerned local car dealers because AT&T broadband had a local search service on which local car dealers advertised? Would your neighbor be frustrated if they could not go to Hulu, but instead had to go to the approved TV distributor who worked with Verizon?
Look, none of that has happened yet, but that is because it was forbidden by regulators until a few weeks ago. It is not anymore, and that illustrates what any sensible regulator should fear. ... Households have gotten used to having unrestricted choice online of innovative services, and there would be a minor revolt if narrow firm self-interest got in the way of that.
I have no axe to grind with carriers, so let me say that more positively. The ... present limitations have fostered an innovative ecosystem. Software vendors and Internet hosting companies have developed a range of innovative services in anticipation of (1) better infrastructure on which to run it, and (2) sending their applications across broadband lines that behave the same way everywhere.
In other words, application vendors do not worry about which carrier delivers the data to which homes because carriers are not allowed to act on their mixed incentives. Knowing that, application developers innovate in all sorts of ways that users enjoy.
Those simple economics explains quite a bit of regulatory action..., it is not surprising the FCC feared what would happen if it permitted no legal restraint on carrier action. ...
There were two economic reasons to take action, and both point towards limiting mixed incentives. One has to do with the incentives to act on mixed incentives today, and the other has to do with the long term trends of the evolutions of the network, which reinforces incentives to act on mixed incentives tomorrow...
I am not saying anything that many other analysts have not noticed. Comcast’s management is ambitious. So is AT&T’s, and so is Verizon’s. They must be considering how a carrier can develop its own television service (instead of relying on Hulu), or get a piece of revenue from selling online movies (instead of letting Netflix collect all the revenue), or get a piece of online advertising for local services (instead of letting Google collect all the revenue).
This is an old lesson in regulatory economics. Commercial ambition from a dominant firm is a good thing when it fuels competitive conduct, innovative services, and invading of new service territories. Ambition from dominant firms is usually not such a good thing when it motivates such those firms to block a rival’s access to channels, when it leads dominant firms to refuse to deal with potential rivals, and when it leads dominant firms to raise a rival’s cost. ...
Mixed incentives are a very old problem in communications access regulation, and easily understood by every regulator on the planet. Every regulator can sense the danger of letting carriers move down the slippery slope of not cooperating with another participant in the Internet ecosystem. That bright line had to be protected, if only for the sake of preserving the innovative ecosystem that has driven the Internet forward in these last two decades.
Let’s hope the ecosystem continues to be innovative in the next decade with these new set of rules.

Tuesday, May 18, 2010

On the Road Again

I am traveling to China today (Beijing) to talk at a conference about US fiscal policy during the crisis, and have no idea about my ability to connect here once I arrive. I assume it won't be a problem, but just in case -- and because I won't have as much time as usual -- I have things set to post automatically until I get back.

Update: Finally here. Here are the slides for my presentation today.

Google is different here, but if I log onto the VPN at school I can get to the regular version. Sometimes my blog won't come up if I'm not logged in to the VPN, but not always, so not sure what's up. Blogs hosted by Google on blogger seem to be missing, and other blogs on TypePad don't always load either (though they do show up on Google unlike the blogs on blogger). With VPN though, no troubles. Anyone know the current state of blog access here?

Monday, September 01, 2008

Browser Wars

Microsoft's new browser will have the ability to block Google ads. Google's answer to this challenge to their business? Release a browser of their own and try to bypass IE altogether:

A fresh take on the browser, Google Blog: At Google, we have a saying: “launch early and iterate.” While this approach is usually limited to our engineers, it apparently applies to our mailroom as well! As you may have read in the blogosphere, we hit "send" a bit early on a comic book introducing our new open source browser, Google Chrome. We will be launching the beta version of Google Chrome tomorrow in more than 100 countries. ...

[W]e began seriously thinking about what kind of browser could exist if we started from scratch and built on the best elements out there. We realized that the web had evolved from mainly simple text pages to rich, interactive applications and that we needed to completely rethink the browser. What we really needed was not just a browser, but also a modern platform for web pages and applications, and that's what we set out to build.

On the surface, we designed a browser window that is streamlined and simple. To most people, it isn't the browser that matters. It's only a tool to run the important stuff -- the pages, sites and applications that make up the web. Like the classic Google homepage, Google Chrome is clean and fast. ...

Under the hood, we were able to build the foundation of a browser that runs today's complex web applications much better. By keeping each tab in an isolated "sandbox", we were able to prevent one tab from crashing another and provide improved protection from rogue sites. We improved speed and responsiveness across the board. We also built a more powerful JavaScript engine, V8, to power the next generation of web applications that aren't even possible in today's browsers.

This is just the beginning -- Google Chrome is far from done. We're releasing this beta for Windows... We're hard at work building versions for Mac and Linux too...

We owe a great debt to many open source projects, ... and in that spirit, we are making all of our code open source as well. ...

Saturday, June 14, 2008

"Microsoft will Survive. Google will Dominate. Yahoo is Toast"

Is Yahoo toast?:

Microsoft the underdog, by Matthew DeBord, Commentary, LA Times: At long last, we have resolution: Microsoft will not ... be taking over Yahoo and going toe-to-toe with mighty Google... Instead, Yahoo, the definitive Web 1.0 company, will be casting its lot with ... Google, the definitive Web 2.0 company. Microsoft, the definitive Web 0.0 company -- ...plying the increasingly dreary straits of operating systems and software -- is out in the cold.

This drama has been playing out since the mid-'90s, when the Internet first established itself as a ... compelling counterpoint to the era of Microsoft, which thanks to its monopoly on the operating system for PCs ... had dominated the dawn of personal computing.

Google and its emerging monopoly on search-based Web advertising is the new name of the game. And now that Microsoft is almost categorically excluded from that competition, we are witnessing the final days of Web 1.0. It may look as though Yahoo has somehow saved itself by rebuffing Microsoft and teaming up with the dark lords of Mountain View. But this is not the case. Microsoft will survive. Google will dominate. Yahoo is toast. ...

In the end, Yahoo believed that it was better to bond with Google, the big new thing, and continue to flip Microsoft the bird, as it has long done. And so, Yahoo has sealed its doom. Our only hope now, as we spy the gruesome Pax Googleannica of Web 3.0 on the horizon, is that renegade survivors of the Web 1.0 pioneer that took its name from Jonathan Swift's race of barbarians will say, "Enough," and join with their former sworn foe to give hope to those of us who see the Web as something better than a merciless "Matrix"-like monetized quantification of all we do and all we are. That's right, as Yahoo makes its Faustian pact with Google, Microsoft -- Microsoft! -- has finally become the heroic underdog.

Friday, June 06, 2008

Paul Krugman: Bits, Bands and Books

"In the new era, the ancillary market is the market":

Bits, Bands and Books, by Paul Krugman, Commentary, NY Times: Do you remember what it was like back in the old days when we had a New Economy? In the 1990s, jobs were abundant, oil was cheap and information technology was about to change everything.

Then the technology bubble popped. Many highly touted New Economy companies, it turned out, were better at promoting their images than at making money — although some of them did pioneer new forms of accounting fraud. ...

So much, then, for the digital revolution? Not so fast. The predictions of ’90s technology gurus are coming true more slowly than enthusiasts expected — but the future they envisioned is still on the march.

In 1994, one of those gurus, Esther Dyson, made a striking prediction: that the ease with which digital content can be copied and disseminated would eventually force businesses to sell the results of creative activity cheaply, or even give it away. Whatever the product — software, books, music, movies — the cost of creation would have to be recouped indirectly: businesses would have to “distribute intellectual property free in order to sell services and relationships.”

For example, ... her most compelling illustration ... was that of the Grateful Dead, who encouraged people to tape live performances because “...people who copy and listen to Grateful Dead tapes end up paying for hats, T-shirts and performance tickets. In the new era, the ancillary market is the market.” ...

Downloads are steadily undermining record sales — but today’s rock bands ... are finding other sources of income. Even if record sales are modest, bands can convert airplay and YouTube views into financial success indirectly, making money through “publishing, touring, merchandising and licensing.”

What other creative activities will become mainly ways to promote side businesses? How about writing books?

According to a report in The Times, the buzz at this year’s BookExpo America was all about electronic books. ...[W]e may finally have reached the point at which e-books are about to become a widely used alternative to paper and ink. That’s certainly my impression after a couple of months’ experience with the ... Amazon Kindle. ...

How will this affect the publishing business? Right now, publishers make as much from a Kindle download as they do from the sale of a physical book. But the experience of the music industry suggests that this won’t last: once digital downloads of books become standard, it will be hard for publishers to keep charging traditional prices.

Indeed, if e-books become the norm, the publishing industry as we know it may wither away. Books may end up serving mainly as promotional material for authors’ other activities, such as live readings with paid admission. Well, if it was good enough for Charles Dickens, I guess it’s good enough for me.

Now, the strategy of giving intellectual property away so that people will buy your paraphernalia won’t work equally well for everything...: news organizations, very much including this one, have spent years trying to turn large online readership into an adequately paying proposition, with limited success.

But they’ll have to find a way. Bit by bit, everything that can be digitized will be digitized, making intellectual property ever easier to copy and ever harder to sell for more than a nominal price. And we’ll have to find business and economic models that take this reality into account.

It won’t all happen immediately. But in the long run, we are all the Grateful Dead.

Wednesday, June 27, 2007

One Big Small Town

I grew up in a small town, a place where everyone knows everyone pretty much, where you go to school with the same group of people from kindergarten through high school, a place where that embarrassing mistake you made in second grade never completely goes away. There are no secrets, at least not for long.

Things are different in a small town because you are rarely anonymous. Interactions on the roads, in grocery stores - anywhere at all really - are never a one-shot game, you always have to be aware that there will be a next time, aware that your reputation informs and is informed by every interaction. When you apply for a job, your whole history comes with you, there's no need for anyone to Google anything but their own brain to know your life story. If you are a business owner, repeat business is everything and you have no chance at all if the town loses trust in you.

This is not an earth-shattering observation or anything, but as I was reading this column by Thomas Friedman on the new realities of the digital world, about how young people need to be aware that their lives are being recorded like never before, I was struck by how much it sounded just like that town:

The World is Watching: ...The implications of all this are the subject of a new book by Dov Seidman, founder and C.E.O. of LRN... His book is simply called “How.” Because Seidman’s simple thesis is that in this transparent world “how” you live your life and “how” you conduct your business matters more than ever, because so many people can now see into what you do and tell so many other people about it...

For young people, ... this means understanding that your reputation in life is going to get set in stone so much earlier. More and more of what you say or do or write will end up as a digital fingerprint that never gets erased. ... For this generation, much of what they say, do or write will be preserved online forever. Before employers even read their résumés, they’ll Google them.

“The persistence of memory in electronic form makes second chances harder to come by,” writes Seidman. “...[L]ife has no chapters or closets; you can leave nothing behind, and you have nowhere to hide your skeletons. Your past is your present.” So the only way to get ahead in life will be by getting your “hows” right. Ditto in business. Companies that get their hows wrong won’t be able to just hire a P.R. firm to clean up the mess...

“We do not live in glass houses (houses have walls); we live on glass microscope slides ... visible and exposed to all,” he writes. So whether you’re selling cars or newspapers (or just buying one at the newsstand), get your hows right — how you build trust, how you collaborate, how you lead and how you say you’re sorry. More people than ever will know about it when you do — or don’t.

Monday, September 18, 2006

All the News That's Fit to Filter

Andrew Leonard at Salon:

Filter proliferation, by Andrew Leonard, Salon: On Friday, Brad DeLong, the economic historian at UC Berkeley who pioneered the art of econoblogging, confessed that it was after lunch and he hadn't yet read the Wall Street Journal. Instead, he was using Mark Thoma at Economist's View and Felix Salmon at Econoblogger "as economic news preprocessors."

Thoma and Salmon, like DeLong, are prolific bloggers. Line up enough of these preprocessors in your blog aggregator, as I do, and you get the benefit of a bevy of smart people filtering the critical news of the day -- and then deconstructing, critiquing, and otherwise adding value to that information. What would once have required taking an article from the Wall Street Journal or New York Times or Financial Times into a graduate level seminar and having it taken apart by a professor and a few other bright students is now available, in infinitely greater scope and detail, for free, on every subject of interest to humanity. For my own project here -- striving to better understand globalization -- the ongoing assembly of rank upon rank of preprocessors on a network of related subjects: the economy, China, India, energy and the environment and intellectual property, has become a vital part of my daily explorations. In the age of information overload, tweaking your filters is job number one.

Continue reading "All the News That's Fit to Filter" »