Category Archives: Research Papers

New paper on Uber competition to taxi service in New York City: net benefits are high.

Tom Lam (Clemson) and Meng Liu (MIT) calculate surplus gains at 72 cents per dollar spent.
“Demand and Consumer Surplus in the On-Demand Economy: The Case of Ride Sharing” Read it here:
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Valuing Spectrum Allocations

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Thomas W. Hazlett, Clemson University
Michael Honig, Northwestern University

Abstract

Observing trends in which Wi-Fi and Bluetooth have become widely popular, some argue that unlicensed allocations hosting such wireless technologies are increasingly valuable and that administrative spectrum allocations should shift accordingly. We challenge that policy conclusion. A core issue is that the social value of a given spectrum allocation is widely assumed to equal the gains of the applications it is likely to host. This thinking is faulty, as vividly seen in what we deem the Broadcast TV Spectrum Valuation Fallacy – the idea that because wireless video, or broadcast network programs are popular, TV channels are efficiently defined. This approach has been appropriately rejected, in key instances, by spectrum regulators, but is similarly applied in other instances regarding unlicensed allocations. While traditional allocations have garnered widespread criticism for imposing rigid barriers tending to block innovation, and flexible-use spectrum access rights have gained favor, the regulatory methods used to allocate (or reallocate) bandwidth remain embedded in a “command and control” process. Reconfiguring spectrum usage to enable emerging wireless markets often requires lengthy, costly rule makings. The expense of this administrative overhead is generally omitted from spectrum allocation policy analysis. Yet, it constitutes an essential component of the consumer welfare analysis. We propose a more fulsome policy approach, one that includes not only the appropriate measures of marginal value and opportunity cost for rival allocations, but incorporates transaction costs. Instead of regulators attempting to guess how much bandwidth should be allocated to various types of licensed and unlicensed services – and imposing different rules within and across these allocations – a more generic approach is called for. By better enabling spontaneous adjustments to changing consumer demands and technological innovation, spectrum allocations can be more efficiently brought into their most valuable employments.

Understanding the Disruptive Innovation Wrought by Computers and the Internet: A Review

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Thomas Hazlett recently reviewed two new volumes on the Information Economy for the International Journal of Economics of Business.  Both Martin Campbell-Kelly and Daniel D. Garcia-Swartz, From mainframes to smartphones: A history of the international computer industry (Harvard University Press, 2015), and Shane Greenstein, How the Internet became commercial: Innovation, privatization, and the birth of a new network (Princeton University Press, 2015), offer important histories — and abundant insights — into today’s tech economy.
Read it here.