New Economic Models

February 8

Note: To make up for the snow day on February 1, tonight's class will run an extra hour, until 8:30pm.

The rise of the networked economy is changing economic possibilities around the world. From the call centers in India to eBay and the new Internet entrepreneurs, there are many signs that suggest a flatter world fueled by innovative production and marketing strategies. In this session, we will explore the promise and reality of the changing economic tides associated with rising Internet use including those marketing to the long tail and the new oligopolists.

Slides: Paradigms for Studying the Internet

Assignments

Assignment 1 due

Readings

• Wikipedia, Dot-com Bubble
• Chris Anderson, The Long Tail
• Kevin Kelly, Better than Free
• Eric von Hippel:
  • The Economics of Open Content Symposium: New Models of Creative Production in the Digital Age Collaboration and the Marketplace - Video stream of the 30-minute presentation: new improved link! (requires RealPlayer). See below for alternate links to the presentation in video and audio format.
  • Democratizing Innovation, Chapter 8: Adapting Policy to User Innovation

Additional Resources

• "Wikipedia Long Tail"
• Free by Chris Anderson[1]

• Larry Lessig's Code 2.0

Class Discussion

All three articles carry a common theme: there's a finite number of dollars in the consumer's pocket and old school marketing demographics are not sufficient. Instead, the key differentiator for success is personalized marketing. Rather than broadcasting advertisements to the general population, each Internet user can be presented with a personalized market basket tailored to his or her precise wants and needs. On one hand, this individualized service can be quite useful and convenient -- like having your own digital gentlemen's gentlemen. On the other hand, personalized service can only be delivered when they possess intimate knowledge of your behavior and desires. It can become quite uncomfortable to consider how much personal information is available on the Internet, and how uncontrolled the sharing of that information has become. -Chris Sura 02:56, 8 February 2011 (UTC)