The diffusion of the internet has had varying effects on the location of economic activity, leading to both increases and decreases in geographic concentration. In an invited column at VoxEU, Chris Forman, Avi Goldfarb and I presents evidence that the internet worked against increasing concentration in invention. This relationship is particularly strong for inventions with more than one inventor, and when inventors live in different cities. Check out the post here.
The web site, Surprisingly Free, organized a podcast about my recent paper, Collective Intelligence and Neutral Point of View: The Case of Wikipedia, coauthored with Harvard assistant professor Feng Zhu. Click here.
The paper takes a look at whether Linus’ Law applies to Wikipedia articles. Do Wikipedia articles have a slant or bias? If so, how can we measure it? And, do articles become less biased over time, as more contributors become involved?
Jerry Brito conducts the interview. This is sponsored by the Mercatus Center at George Mason University. In the podcast we discuss the findings of the research.
Misunderstandings and misstatements perennially pervade any debate about public funding of research and development. That must be so for any topic involving public money, almost by definition, but arguments about funding for scientific research and development contain a unique and special irony.
Well-working government funding is, by definition, difficult to assess, because of two criteria common to subsidies for R&D at virtually all western governments: specifically, governments seek to fund activities yielding large benefits, and these activities should be actions not otherwise undertaken by the private sector.
The first action leads government funders to avoid funding scientific research with low rates of return. That sounds good because it avoids wasting money. However, combining it with the second criteria does some funny things. If private firms only fund scientific R&D, where the rate of return can be measured precisely, government funding tends to fund activities where returns are imprecisely measured.
That is the irony of government funding of science. Governments tend to fund scientific research in precisely the areas where the returns are believed to be high, but where there is little data to confirm or refute the belief.
This month’s column will illustrate, with a little example, the server software Apache. As explained in a prior column (“How Much Apache?”), Apache was borne and invented with government funding. Today, it is rather large and taken for granted. But how valuable is it? What was the rate of return on this publically funded invention? It has been difficult to measure.
Almost with inexorable momentum, the Internet hurls itself into new territory. Some time ago, more than two billion humans had adopted at least one Internet-enabled device in some form, and nobody doubts that another two billion will accrue soon. New webpages increasingly find ways to inform readers, as more information in a variety of formats continues to be layered on the basic system of data internetworking.
That growth has been measured in a variety of dimensions. Today I would like to report on some research to measure one aspect of the Web’s growth, which I did with Frank Nagle, a doctoral student at Harvard Business School. We sought to figure out how much Apache served web surfers in the United States.
That is not a misprint. Apache is the name for the most popular webserver in the world. It is believed to be the second most popular open source project after Linux.
Why do this? Measuring Apache is a key step in understanding the underlying economics. Because it’s free, Apache’s value is easy to mismeasure, and that makes its economics easy to misunderstand. (more…)
The Economist sponsors a blog called Free exchange. This week Free exchange solicited posts to complement an article in the 
magazine that discusses challenges measuring the consumer surplus generated by the internet. They invited experts in the field to comment on the piece and on related research. I made a contribution explaining the challenges in measuring consumer surplus of a free product.
The University of Michigan announces an eleven-month postdoctoral fellowship position. The position will start September 1, 2013.
Position Description
The Department of Communication Studies (in the College of Literature, Science, and the Arts) and the School of Information are jointly offering a postdoctoral fellow position in the multidisciplinary area of “infrastructure studies.”
The addition of information technology is transforming the way society provides important infrastructures, including those that support media, telecommunications, power, and transport, but also those that support knowledge, culture, and scientific data. Thanks to new capabilities in computing and control, every year our infrastructures claim to be “smarter,” with new capacities for distributed processing, analysis, sensing, adapting, and autonomous self-improvement. This radical transformation is well underway, but the assessment of its consequences is still in its infancy. For example, infrastructure unevenly distributes benefits and capabilities, with complex and sometimes unforeseen implications for politics, economics, knowledge, and social justice (to name just a few domains). This position will fund a researcher who will have the opportunity to work alongside senior collaborators to define and shape this new area of scholarship.
Salary: $50-60,000 per year (depending on negotiated duties), plus a competitive benefits package, $5,000 in discretionary funding, and the opportunity to appoint and supervise one or more paid undergraduate research assistants to work on projects of your choice.
This position is made possible by an MCubed grant.
Review of applications will begin immediately and continue until the position is filled.
Download the complete position description, requirements, and application process here.
What do you know about Creative Commons, the legal frameworks that support many web-based activities, such as Wikipedia, Flickr, or YouTube? You probably do not know too much, if you are like most people. Most users do not know the legal details behind the web – and that is a fact, as you will see in a moment.
You might reasonably respond that it does not matter what users know. Knowing the legal details makes no difference to enjoying and using the services. Indeed, the general ignorance of the users shows just how sophisticated and easy-to-use many of the leading web services have become. You also might respond in a contrary fashion, that most users are inviting disaster by remaining ignorant. Knowing the details does not matter on 99 days of pain-free use, but someday there will come a day it matters, and not knowing will bite users hard.
Those two opposing responses are both reasonable answers, I believe, because the state of the discussion remains in flux. No good answer to these questions dominates the topic for now. At present it is enough to ask the question, and recognize that the answer is open.
During the first week of December I visited Tokyo, Japan, and spoke about platforms. This was my first visit to Japan. Accordingly, this post mixes commentary with a bit of travelogue.
Platforms are reconfigurable base of components on which participants build applications. Platforms have a long history in computing and electronics, with examples going back to IBM, Microsoft and Intel, among many others. Google and Apple are recent practitioners, and their prominence has renewed interest in platform strategies. It is, however, not entirely transparent to a non-expert how the (newer) discussions about platforms relates to the (familiar) analyses of standardization. My talk pointed out some of those links.
Background to set the scene: I stayed at Hitotsubashi University (on the left), a lovely campus in a residential neighborhood a train ride out from downtown Tokyo. I traveled there at the invitation of Professor Reiko Aoki, a professor at the university, and a member of an advisory group for the government on technology policy. She arranged for a presentation at the university, and another at the Research Institute for Economy Trade and Industry (REITI), a part of METI, the government agency with many experts in industrial policy. Professor Aoki and I both share an interest in standards. Sadao Nagaoka, also from Hitotsubashi and an expert in technology policy, provided commentary. We are pictured together at REITI at METI (at the top).
Behind every successful technology lie many quirky stories showing how it grew like a teenager or barely averted disaster. With the
passage of time, most of those stories fade into obscurity or, at best, become parts of verbal explanations accompanying countless resumes. The few events that find their way into public discourse, if any do at all, normally get stripped of context and nuance, losing the contours that actually mattered to those who participated.
Perhaps that’s why those who developed Wi-Fi decided to write a collective memoir, bringing much to the fore that would otherwise fade. What the world today calls Wi-Fi began as experiments with wireless LANs, and became embedded in IEEE Standard 802.11, and only then did it explode into a plethora of products and services. Every stage involved numerous quirky events and lessons.
The resulting book, The Innovation Journey of Wi-Fi: The Road to Global Success (Cambridge University Press, 2010), involves almost a score of contributors, including many influential voices in the Wi-Fi world. For a certain kind of reader, this is a great book. Are you that kind of reader? Let’s find out. (more…)
Is an organic listing a substitute or complement for an ad? More precisely, if a firm had a high listing on an organic listings in Google’s search engine, would there be much gain to having an ad as well? Or would that merely provide traffic that would have come anyway?
That is the question addressed in recent research by Sha Yang and Anindya Ghose, published in Marketing Science in 2010. Kudos to these researchers for figuring out how to approach this question. It is not easy to assemble the appropriate data for an experiment to answer this question.
The answer? In a nutshell, using 3-months of archival data and controlled field experiments they show that organic and sponsored listings act as complements for each other. Said another way, in the absence of sponsored listings, clicks, conversions and revenues for firms are lower on organic listings than when both paid and organic are present. They argue that this happens because of a reinforcement effect of seeing the same firm listed twice in the same screen. More people will visit a website if it is listed in both paid and 
organic listings because there is a “second opinion effect.”
This has relevance to the recent Senate hearings about Google. If Google favors its own listings then they are pushing out listings from other firms, firms who pay for ads. There must be a marginal firm who gets a little less value from their ad because their organic listing does not make it on the front page.
It also has relevance for competitive advantage on the web. If ads and listings are complements, then large and organized firms have advantages. They can arrange to buy ads, and they can invest more in generating useful listings.
Virulent Word of Mouse 