The Economics of Internet Search

This lecture provides an introduction to the economics of Internet search engines. After a brief review of the historical development of the technology and the industry, I describe some of the economic features of the auction system used for displaying ads. It turns out that some relatively simple economic models provide significant insight into the operation of these auctions. In particular, the classical theory of two-sided matching markets turns out to be very useful in this context.

Internet Economics

The Internet, a growing network of networks, is an often touted and often misunderstood technology. It has its own infrastructure complete with service providers, private networks, user communities, international links, etc. similar to telephone or telegraph industries. However, the Internet is more decentralized and less application-specific than traditional telecommunication industries. These differences extend beyond the technology of the Internet to the economics and policies. This paper explores Internet economics, a growing field which encompasses the technology, economics, and policy surrounding the Internet. It identifies different communities who have overlapping interests in this field and how their preconceived notions of how the Internet operates create contradictory views on how this technology will continue to evolve in a self-sustaining manner. Specifically, it explores the issue of usage sensitive pricing versus flat-fee pricing as applied to the Internet. It provides anecdotal evidence to support general views communities have towards pricing issues. It identifies roadblocks to implement usage sensitive pricing on the Internet. It describes short-term projects that will provide better data to enable a better understanding of the issues

Internet economics and policy: An Australian perspective

Publicly available information indicates that the demand and supply of Internet and Internet-related services are continuing to expand at a rapid pace. Since 1997 the number of Internet service providers (facilities-based and resellers) has increased by nearly 40 per cent; the number of points-of-presence per Internet service provider has increased by five times; the number of hosts connected to the Internet has more than quadrupled; and Internet traffic has increased from six to 10 times. The emergence of electronic commerce (e-commerce), driven by this rapid adoption of Internet services and continual technological innovation, is likely to have profound economic and social impacts on Australian society. This paper provides a detailed analysis of the impact of the Internet and e-commerce, ranging from the changes in the market structure of the telecommunications industry, its role in changing the organisation of traditional markets, the emergence of new markets, and the structural shifts to employment, productivity and trade. The paper also analyses contemporary Australian regulatory responses. IIe-commerce; internet economics

Trust among Internet Traders: A Behavioral Economics Approach

Standard economic theory does not capture trust among anonymous Internet traders. But when traders are allowed to have social preferences, uncertainty about a seller's morals opens the door for trust, reward, exploitation and reputation building. We report experiments suggesting that sellers' intrinsic motivations to be trustworthy are not sufficient to sustain trade when not complemented by a feedback system. We demonstrate that it is the interaction of social preferences and cleverly designed reputation mechanisms that solves to a large extent the trust problem on Internet market platforms. However, economic theory and social preference models tend to underestimate the difficulties of promoting trust in anonymous online trading communities.

The Economics of Internet Markets

The internet has facilitated the creation of new markets characterized by large scale, increased customization, rapid innovation and the collection and use of detailed consumer and market data. I describe these changes and some of the economic theory that has been useful for thinking about online advertising markets, retail and business-to-business e-commerce, internet job matching and financial exchanges, and other internet platforms. I also discuss the empirical evidence on competition and consumer behavior in internet markets and some directions for future research.internet, market, innovation, advertising, retail, e-commerce, financial exchanges

Is Peer Review in Decline?

Over the past decade there has been a decline in the fraction of papers in top economics journals written by economists from the highest-ranked economics departments. This paper documents this fact and uses additional data on publications and citations to assess various potential explanations. Several observations are consistent with the hypothesis that the Internet improves the ability of high-profile authors to disseminate their research without going through the traditional peer-review process.

Bridging the digital divide - how enterprise ownership and foreign competition affect Internet access in Eastern Europe and Central Asia

Many observers attributed the rapid productivity growth observed in the United States in the mid- to late 1990s, to the growing use of information, and the Internet. This in turn created concern that developing, and transition economies - where use of information technology, and the Internet was less widespread - would be left behind as productivity, and growth accelerated in technologically advanced countries, and stagnated elsewhere. Using enterprise-level data from twelve transition economies, the author looks at factors that affect whether enterprises in these countries are connected to the Internet. He finds that foreign-owned enterprises are more likely to have Internet access than other enterprises. And that employee-owned enterprises are less likely to have access. Even after controlling for other factors that might affect Internet connectivity, the quality of a country's telecommunications infrastructure appears to have a significant effect on the likelihood that an enterprise in that country has Internet access. Reducing corruption, and taking other steps to improve the business environment, would benefit domestic economies, even if Internet access had little short-term impact on productivity, or growth.General Technology,Knowledge Economy,Environmental Economics&Policies,Banks&Banking Reform,Economic Theory&Research,General Technology,Environmental Economics&Policies,Banks&Banking Reform,Education for the Knowledge Economy,Knowledge Economy