Скачать презентацию Markets Computers and Society Kathy E Gill 8 Скачать презентацию Markets Computers and Society Kathy E Gill 8

d4c4a9d9ce5d9ea8e244b548fb4b788a.ppt

  • Количество слайдов: 22

Markets, Computers and Society Kathy E. Gill 8 February 2008 Markets, Computers and Society Kathy E. Gill 8 February 2008

Overview o Economics! n n o Types of goods Network effects Examples of open Overview o Economics! n n o Types of goods Network effects Examples of open source software and networks

But first …. o This instrument can teach, it can illuminate; yes, and it But first …. o This instrument can teach, it can illuminate; yes, and it can even inspire. But it can do so only to the extent that humans are determined to use it to those ends. Otherwise it is merely wires and lights in a box. There is a great and perhaps decisive battle to be fought against ignorance, intolerance and indifference. This weapon of television could be useful. Edward R. Murrow, 1958, RTNDA Convention

Supply and Demand o o Most widely used economic model Describes how consumers and Supply and Demand o o Most widely used economic model Describes how consumers and producers interact to determine the price of a good and the quantity that will be produced/sold

Supply-Demand Supply-Demand

Demand Curve o o o Shows the quantity of a good (or service) that Demand Curve o o o Shows the quantity of a good (or service) that consumers are willing to buy at each price Assumes “all other things” remain constant (static) Law of Demand: curve slopes “downward” (P on the vertical axis)

Supply Curve o o o Shows the quantity of a good (or service) that Supply Curve o o o Shows the quantity of a good (or service) that businesses are willing to sell at each price Assumes “all other things” remain constant (static) No “law of supply”

Types of Goods o o (1/2) Non-rival - a good that can be used Types of Goods o o (1/2) Non-rival - a good that can be used by more than one person at the same time (an idea) Non-excludable - it is not possible for the “owner” to exclude others from consuming this good (non-patented idea)

Types of Goods (2/2) Rival Most consumer goods o Private land o Services: dental, Types of Goods (2/2) Rival Most consumer goods o Private land o Services: dental, rental cars, tax prep o Single license software o Excludable Non. Excludable o o o Public land Most roads Water? Non-Rival o o o o Trade secrets Multi-license software Patents Subscription web sites Basic research Defense, police, firemen Lighthouse “Open” websites

Supply of innovation o Dependent on n State of scientific/technological knowledge (technological opportunity) Cost, Supply of innovation o Dependent on n State of scientific/technological knowledge (technological opportunity) Cost, availability of inputs (knowledge workers, equipment) Ability to capture increased profits arising from the innovation (appropriability)

Demand for innovation o Dependent on n Cost reduction (process innovation) Consumer benefit from Demand for innovation o Dependent on n Cost reduction (process innovation) Consumer benefit from new product (product innovation) Consumer benefit from improvement in existing product (incremental product innovation)

Network effects o (1/2) Static analysis: n n One person’s decision to adopt a Network effects o (1/2) Static analysis: n n One person’s decision to adopt a new piece of software (or other technology) has no effect on someone else’s welfare or decision to adopt Assumes no network externality

Network effects o (2/2) Dynamic analysis: n n The value of the software (or Network effects o (2/2) Dynamic analysis: n n The value of the software (or technology) depends upon the decisions of others (interoperability, for example) Assumes there is a network externality

Locked In! o Consumers may be locked into a network because of “cost of Locked In! o Consumers may be locked into a network because of “cost of exit” (switching) n n n Contracts (cell phone 24 -month policies) Training (learn a new system – ugh) Data conversion (from Word to Word Perfect, for example) Search cost (finding the new product) Loyalty cost (frequent flyer programs, “minutes carry-over”)

Tipping o As market share increases for any one product (system, technology), there are Tipping o As market share increases for any one product (system, technology), there are increasing returns (externality) from increasing consumer demand, leading to dominance by one system

Examples o o o AM v FM radio Beta v VHS Mac v Windows Examples o o o AM v FM radio Beta v VHS Mac v Windows QWERTY v DVORAK Blue. Ray v HD-DVD

How Does Open Source Fit? o o o Assumes many minds greater than a How Does Open Source Fit? o o o Assumes many minds greater than a few Assumes transparency leads to higher quality Enabled by virtual computer network

Examples (some conceptual) o o o ARPANET development of standards for telecom protocols 1998: Examples (some conceptual) o o o ARPANET development of standards for telecom protocols 1998: Netscape releases Navigator source code Apache (web server) Firefox, Thunderbird, Mozilla Wikipedia Digg, Slashdot, The Blogosphere

Summary o o Digital media change the economic landscape because economy theory is based Summary o o Digital media change the economic landscape because economy theory is based on scarcity Digital goods are more like non-rival, non-excludable goods than industrial age goods

Discussion o o o Pros and cons of open source software, philosophy on society Discussion o o o Pros and cons of open source software, philosophy on society as a whole? How can businesses engage the market on a more “human” level? What are consequences of a post-scarcity era? If there is resistance to embracing the open source software movement, where might it originate? From companies wanting to protect their proprietary information? From programmers concerned about earnings potential? Somewhere else? What is the impact of business models like Amazon, Netflix & Rhapsody on bricks-and-mortar stores like Borders, Blockbuster & Tower Records?

Discussion Leaders - For Wed o o Spread around the room, find a computer. Discussion Leaders - For Wed o o Spread around the room, find a computer. Gather in groups of 3 -4 + leader Leaders share info – engage in discussion Groups “move” but leaders stay seated

Questions (3 x 5 cards) o o o What insights did you make today? Questions (3 x 5 cards) o o o What insights did you make today? What (if any) learning or skills goals do you have for the rest of the quarter? Thinking back to week 1: n n What has been a highlight to you and why? What would you change (about the class, yourself, etc) if we could “do over” and why?