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Economics

A collection of 67 issues

Not Recommended: Why Current Content Recommendation Systems Fail Us

Recommendation systems paint a wonderful picture: The system automatically gets to know you and caters to your preferences. And that is indeed what happens, except that the picture is warped. Warping happens for three reasons: 1. Humans want more than immediate gratification. The systems, however, are designed to learn from

Not Normal, Optimal

Reports of blood work generally include guides for normal ranges. For instance, for LDL-C, in the US, a score of < 100 (mg/DL) is considered normal. But neither the reports nor doctors have much to say about what LDL-C level to aspire for. The same holds true for things

Why Are the Prices the Same?

Many times within a narrow product category like breakfast cereals, ice cream tubs, etc., the prices of different varieties within a brand are the same. The same pattern continues in many ice cream stores where you are charged for the quantity instead of the flavor or the vessel in which

Cracking the Code: Addressing Some of the Challenges in Research Software

Macro Concerns 1. Lack of Incentives for Producing High-Quality Software. Software’s role in enabling and accelerating research cannot be overstated. But the incentives for producing software in academia are still very thin. One reason is that people do not cite the software they use; the academic currency is still

When Is Discrimination Profit-Maximizing?

In the textbook world, many firms compete to fill identical jobs, many qualified workers stand ready to take them, information about productivity is perfect and free, and moving between jobs costs nothing. In that frictionless setting—Gary Becker’s benchmark—an employer that indulges a “taste for discrimination” pays for

Generative AI and the Market for Creators

Many widely used machine-learning models rely on copyrighted data. For instance, Google finds the most relevant web pages for a search term by relying on a machine learning model trained on copyrighted web data. But the use of copyrighted data by machine learning models that generate content (or give answers

Hidden Code: Why Do Companies Open Source Code and Publish Papers?

Hardly a day passes without a major company announcing the release of a new scientific paper or code around a powerful technique. But why do so many companies open-source (via papers and code) so many impactful technologies almost as soon as they are invented? The traditional answers—to attract talent,

Tipping Lemons: Market Failures in Tips

Many service markets pay workers partly through tips that arrive after service is delivered. Servers cannot observe each customer's true tipping propensity in advance; they infer it from coarse, visible cues (such as a group marker $C$) and past averages. If a group $A$ is believed to tip

Reducing Friction in Selling Data Products: Protecting IP and Data

Traditionally, software has been distributed as a binary. The customer “grants” the binary a broad set of rights on the machine and expects the application to behave, e.g., not snoop on personal data, not add the computer to a botnet, etc. Most SaaS can be delivered with minor alterations

Is The Price Right? Dramatic Variability in Prices of Generic Goods Over Short Periods on Major Web Retailers

It used to be that retail prices of generic products like coffee mugs, soap, etc., moved slowly. Not anymore. On major web retailers like Amazon, for a range of generic household products, the variation in prices over short periods of time is immense. For instance, on 12-Piece Porcelain, 12 Oz.