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) I really like this TED video of Larry Lessig. Not only is the content applicable to the class, but the presentation is extraordinary. [Larry Lessig on the laws that choke creativity]--SCL 02:29, 10 February 2011 (UTC)

Kevin Kelly's Better Than Free was particularly interesting to me. He said, "Nor are legal skills surrounding Intellectual Property and Copyright very useful anymore." As a student who wishes to be an IP lawyer, I consider it quite important to examine his assertion and the future of IP Law field as well. In his writing, he insisted that super-distribution system of the Internet is leading to excessive abundance of information and thus creating limitless free copies floating around the digital world. I wonder whether he assumed that legal knowledge is also one of the things that can be easily duplicated, used, and applied without any academic devotion to the subject. Was he implying that the prevalence of wrongdoing - distributing creative works without due process or permission - can justify such act and nullifies existence of legal principles? Classmates, I would love to hear your opinions. Thanks! --Yu Ri 12:49, 12 February 2011 (UTC)

One of the podcasts I listened to today was Chris Anderson's speech on "The Long Tail" for Center for Internet and Society at Stanford Law School. His presentation mainly talks about how our economy has changed from the 'blockbuster-hit culture' to the diverse long tail model. While following his explanation, I realized that I also accepted the so-called bestsellers as the comprehensive reflection of society's demand - without any doubt. But looking back from now, I ask, was it the actual compendium of people's taste? According to the logic behind Brithday Problem, it is no exaggeration to say that reaching an agreement among millions of people is literally impossible. Considering such fact, the margin of error in a bestseller chart must be enormously large. Borrowing from Yonchai Benkler's terms, "Long Tail" can be defined as the phenomenon of what was "once on periphery of economy moving to the core of economic life." Today is truly the era in which diversity is supported and even emphasized for economic profits, the circumstance quite different from Industrial Era when mass production was the sole God. --Yu Ri 12:38, 21 February 2011 (UTC)

Links

• Center for Internet and Society Podcast By Stanford Law School Center for Internet and Society

[2]