Posts

Showing posts with the label Big-tech

Decision Making as Output and Bounded Rationality

-
  The classical economics theories proceed on the assumption of rational agents. Rationality implies the economic agents undertake actions or exercise choices based on the cost-benefit analysis they undertake. The assumption further posits that there exists no information asymmetry and thus the agent is aware of all the costs and benefits associated with the choice he or she has exercised. The behavioral school contested the decision stating the decisions in practice are often irrational. Implied there is a continuous departure from rationality. Rationality in the views of the behavioral school is more an exception to the norm rather a rule. The past posts have discussed the limitations of this view by the behavioral school. Economics has often posited rationality in the context in which the choices are exercised rather than theoretical abstract view of rational action. Rational action in theory seems to be grounded in zero restraint situation yet in practice, there are numerous restra
Post a Comment
Read more

Real Life Economics: Big Tech and Network Effects

-
  In a few recent posts the increasing power of Big Tech and the possible consequences of the same were discussed. There is an increasing tendency of over reach by the Big Tech and thus has potential impact on the socio-economic-politic equilibrium of the society or the country. Their over reach was manifested in the US elections of late and has been in some ways manifesting itself in the Indian context too.   It would not erroneous to assume Big Tech is growing too big for their shoes and the states need to curb them. The roots of this power perhaps can be traced to early 2000s when Bill Clinton administration compromised with Microsoft in the anti-trust suits thus ensuring Microsoft was not split. Given the more than generous help given by the Big Tech in their campaign, President Biden is unlikely to go hard on them. In fact, this might embolden them to scale in their experiments in different countries. However a question at this stage would be what gives them the power to dictate t
Post a Comment
Read more

Trump, Twitter and Intermediate Liability-

-
In 2012, there were bills with identical objectives introduced in both houses of the US Congress. One was the Stop Piracy Bill (SOPA) while the other was Protection of Intellectual Property Bill (PIPA). Entertainment and publishing firms were demanding an end to piracy which seemed to be major headache in increasing revenues. The culprits were ostensibly the online platforms that had mushroomed all over. The platforms included YouTube, Facebook, Twitter among others. However, it was YouTube which seem to host maximum pirated videos. The proposals for these legislations was to hold these platforms accountable for hosting the pirated content.   Unsurprisingly there was a huge uproar by these platforms. The platforms claimed they were merely the repositories of user generated content and do not claim responsibility for the authenticity of the content. They claimed that given the traffic on their sites, it was all but impossible to monitor each and every content. Any content flagged as
Post a Comment
Read more

David vs Goliath, Big Tech and Schumpeter

-
In technology industries, often the incumbent seeks to see off the challenges through an attempted blockage of technological progress. The radio industry led the top down development of television industry as visual extension of radio rather than an alternate medium thus hindering its progress for more than half a century. FM radio was literally crushed before it re-emerged in different context at a very different point of time. The crime of FM radio was given its inherent advantage over AM radio, it would have cannibalized the later. The AM radio industry had made significant legacy investment which would have gone begging. To protect their legacy investment against a raging Schumpeter they killed the FM industry or almost so.   The history of such technological battles for supremacy is replete with instances. In 1876, Western Union, ‘misused’ its monopoly in telegraphy, to ensure its candidate Rutherford Hayes get elected as President of United States of America. In fact, one
Post a Comment
Read more

Shape and Structure of Big Tech

-
In the US, the approaching elections has resulted in the rediscovery of the curse of bigness. The last major action sought was against Microsoft in the late 1990s and early 2000. However the end result rather than the intended split was a mere rap in the knuckles for Microsoft. There were threats of action during the Obama regime but very little concrete action. In contrast, during Obama, the big technology firms gained in size and market power. Currently, a bipartisan effort is underway to tame the ‘big-tech’, with most suggestions pinpointed on the splitting of big-tech. In orthodox dialect, big tech refers to Google, Apple, Facebook, Amazon and Microsoft. It however can be expanded to other firms also. Little dispute exists over the power build-up of these firms in the last decade or so. Facebook with its acquistions of Instagram and WhatsApp has virtually become undisputed in the social media space. Similarly through multiple approaches irrespective of ethicality or otherwis
Post a Comment
Read more