DECON Final

3-1. What are the key economic concerns about auction design?

- Collusion: bidders using trailing digits to collude - Bids limited to integer multiples of the minimum increment

12-2. Priorities of Stand Out economies

- Expanding adoption of digital consumer tools (e-commerce, digital payments, entertainment) - Attracting digital talent - Fostering digital entrepreneurial ventures - Providing fast broadband internet access

12-3. Priorities of Watch Out Economies

- Making long term investments to address basic infrastructure gaps

7. What are some emerging competitive concerns related to big data and its uses?

1. Data is a product. Google turned off third party data sharing so that they can hoard data. 2. Most firms consider all data lawful and unproblematic and could be put to any use

4. What is 5G technology and how will it improve efficiency

5G technology delivers high data speeds, more capacity, and improved efficiency. Spectrum is a finite resource, so improved capabilities of spectrum through 5G will promote efficiency. It encourages development and innovation as it gives businesses new tools to improve.

1. Summarize the impact of the digital divide based on the St. Louis Fed article of Nov 2018.

Absence of access to technology and/or internet, often in poorer and/or rural parts of the U.S and world Leaves certain members of society behind and impacts their ability to find jobs, develop new skills, and gain upward economic mobility

Describe the importance of broadband investment from a microeconomics perspective. How is it also important from a macroeconomics perspective? Use graphs If appropriate.

Broadband investment is important to microeconomics as it enables people to search for jobs and learn marketable skills. These are important for upward mobility as there is a demonstrated gap in upward mobility found between those who can use the internet and those who can not. Broadband is important to macroeconomics because it will help more people and businesses adapt and participate in the digital economy.

11-2. What are the cons of central bank digital currencies?

Cons: - Central banks have complete control - Less privacy for users - Difficult to attain widespread adoption - Possible competition between central and commercial banks

9-1. How can data impact the macroeconomic outcomes of growth

Data leads to growth through providing efficiency in the example of financial markets. Data reduces information asymmetries between lenders and borrowers and thus reduces the cost of financing.

3-2. How do auctions facilitate good elementary economics?

Efficiency - Allows for the firm who values the license the most to win it, a firm who values it enough to make a winning bid will likely use it efficiently, ensuring economic efficiency Fairness - Auctions are objective, open, and transparent. No political bias. Revenue Maximization - Auctions raise significant revenue for public with 32 previous auctions raising $32 billion for the U.S Treasury

2-3. Describe and discuss the roles in the net neutrality debate of end users

End users need both ISPs and content providers to work in tandem.

2-1. Describe and discuss the roles in the net neutrality debate of internet service providers.

ISPs: Without net neutrality ISPs have the ability to throttle certain content and preferentially treat certain content providers. Problematic with M&A such as AT&T and Time Warner

9-2. How can data impact the macroeconomic outcomes of equity

In financial services, data can alleviate adverse selection that excludes vulnerable populations by sharing individual financial data across all financial service providers.

8-2. What are five key principles of the GDPR

Lawfulness, fairness and transparency — Processing must be lawful, fair, and transparent to the data subject. Purpose limitation — You must process data for the legitimate purposes specified explicitly to the data subject when you collected it. Data minimization — You should collect and process only as much data as absolutely necessary for the purposes specified. Accuracy — You must keep personal data accurate and up to date. Storage limitation — You may only store personally identifying data for as long as necessary for the specified purpose. Integrity and confidentiality — Processing must be done in such a way as to ensure appropriate security, integrity, and confidentiality (e.g. by using encryption). Accountability — The data controller is responsible for being able to demonstrate GDPR compliance with all of these principles.

5. What are the economic efficiencies which are enhanced by targeted advertising?

Leads to first degree price discrimination because of better estimates of elasticity of demand Matching reduces the amount of resources devoted to aggregating and sorting buyers, lowers costs, increases the accuracy of the match and increases utility

2-2. Describe and discuss the roles in the net neutrality debate of content providers

Net neutrality protects content providers from having to jockey for preferential treatment from ISPs. Content providers would have a harder time reaching end users without net neutrality.

11-1. What are the pros of central bank digital currencies?

Pros: - More efficient and secure payments - Allow consumers to use central bank directly - Eliminate risk of a commercial bank collapse - Easy to track

13. What is meant by the innovation-inclusion tradeoff as discussed in the HBS article on Digital Progress?

Similar to equity/efficiency tradeoff: - If resources are devoted to innovation, resources are diverted from marketing, etc. - Inclusion-more consumers in the marketplace Similar to Opportunity Cost: - More to do with resources than time - If resources are being devoted to one thing, then can't be devoted to another

12-1. Compare and contrast Stand Out economies from Watch Out economies

Stand Out Economies: - Economies with high levels of existing digitization and strong momentum in continuing to advance their digital capabilities Watch Out Economies: - Shortcomings in both existing digital capabilities and momentum for future development

8-1. Describe what the GDPR is

The General Data Protection Regulation is the EU's data privacy law. Key Principles (according to GDPR.EU): Lawfulness, fairness and transparency — Processing must be lawful, fair, and transparent to the data subject. Purpose limitation — You must process data for the legitimate purposes specified explicitly to the data subject when you collected it. Data minimization — You should collect and process only as much data as absolutely necessary for the purposes specified. Accuracy — You must keep personal data accurate and up to date. Storage limitation — You may only store personally identifying data for as long as necessary for the specified purpose. Integrity and confidentiality — Processing must be done in such a way as to ensure appropriate security, integrity, and confidentiality (e.g. by using encryption). Accountability — The data controller is responsible for being able to demonstrate GDPR compliance with all of these principles.

9-3 How can data impact the macroeconomic outcomes of stability

The increasing value of data incentivizes firms to prioritize cybersecurity to preserve their reputation as reliable custodians of customer data.

6. What are some reasons for government intervention in the realm of privacy protection?

The market will not lead to the optimal provision of privacy so government needs to oversee data privacy. Imperfect Information - Consumers may not know their information is being collected, stored, and sold. Consumers may agree to provide private information without anticipating this information will be sold to other vendors.

Summarize the results of the study on municipal broadband. What are the caveats noted by the author?

The study revealed that the introduction of municipal broadband systems do not significantly affect employment status, wages, information technology employment, self-employment, and business income.

What are the three economic characteristics of data? (The Economics and Implications of Data)

The three economic characteristics of data are non-rivalry and the associated returns to scale and scope, privacy externalities, and partial excludability. Non-rivalry exists in data because the use of that data by one group does not diminish the ability for others to use it. This leads to data being licensed for usage rather than being bought and sold like other goods. Privacy externalities is when the data subject is unaware their data is being collected and there are private decisions on whether and how to collect, process, and share the data subject's data. Data partially excludable as transactions may be structured to only be between two parties, but this is not always perfectly enforced.

Show the simple example of how two-sided pricing leads to rent shifting between content providers and the ISP? (Refer to "Net Neutrality: A Fast Lane to Understanding the Tradeoffs)

Two-sided pricing leads to a redistribution of rents between content providers and the ISP. In addition to charging the customer, the ISP charges the content provider a fee of t=R, where R is the rent the content provider would have made under one sided pricing.