Trends in the Information Economy Lauren Restivo 15 May 2014.
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Transcript of Trends in the Information Economy Lauren Restivo 15 May 2014.
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Trends in the Information Economy
Lauren Restivo15 May 2014
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Agenda
• The Information Economy• Measuring Input and Output in
Knowledge Industries• Knowledge Spillovers and Innovation• Consumer Surplus as an Alternative
Metric
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The Information Economy
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Keywords
• Productivity: output/input• Output: the number of items
produced• Labor productivity: output/hour
worked • Standard of living: output/person
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Examples
• The New York Times• Google• The Internet and YouTube
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Dow Jones Industrial Average
Companies
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Would you rather
have $40,000 to spend at 2013 prices or $400,000 to spend at 1913 prices,
but only be able to buy goods and services that were available in 1913?
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Measuring Input and Output in Knowledge
Industries
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Bundling
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Knowledge Spillovers and Innovation
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If you could create information about a new library process for
$10 but the sale of that information would only result in a $2 return, would you create that
information?
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But what if this $10 information would have value for everyone in the library industry, without
hurting you?
What if the cumulative value that this $10 information would
create is $100 across every library in the country?
The social return for the information you create is a $90 profit, but your private loss is
still $8.
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Examples
• Libraries and book publishers• Photocopiers and academic journals
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Consumer Surplus as an Alternative Metric
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Agenda
• The Information Economy• Measuring Input and Output in
Knowledge Industries• Knowledge Spillovers and Innovation• Consumer Surplus as an Alternative
Metric
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Works Consulted• Brynjolfsson, E., & McAfee, A. (2011). Race against the
machine. Lexington, MA: Digital Frontier Press. • Brynjolfsson, E., & Saunders, A. (2010). Wired for
innovation. Cambridge, MA: MIT Press. • Freeland, C. (2012). Plutocrats. London, UK: Penguin Press. • Jarvis, J. (2008). What would Google do?. New York, NY:
Harper Collins. • Jarvis, J. (2011). Public parts. New York, NY: Simon and
Schuster. • Understanding the digital economy (2000). In Brynjolfsson
E., Kahin B. Cambridge, MA: MIT Press. • Varian, H. (2004). The economics of information
technology. Cambridge, UK: Cambridge University Press.