Applied Economics in the Digital Era: Essays in Honor of Gary Madden

Description

Gary Madden was a renaissance man with respect to the nexus between information and communications technology (ICT) and economics. He contributed to a variety of fields in ICT: applied econometrics, forecasting, internet governance and policy. This series of essays, two of which were co-authored by Professor Madden prior to his untimely death, cover the range of his research interests. While the essays focus on a number of ICT issues, they are on the frontier of research in the sector. Gerard Faulhaber provides a broad overview of how we have reached the digital age and its implications. The applied econometric section brings the latest research in the area, for example Lester Taylor illustrates how own-price, cross-price and income elasticities can be calculated from survey data and translated into real income effects. The forecasting section ranges from forecasting online political participation to broadband’s impact on economic growth. The final section covers aspects of governance and regulation of the ICT sector. Preface Contents Editors and Contributors List of Figures List of Tables Chapter 1 Civilizations’ Economic Drivers: Babylon to Bitstream First Wave: Civilizations and Economic Drivers Second Wave: Civilizations and Economic Drivers Third Wave: Civilizations and Economic Drivers Cyber-Civilization: What Are the Consequences? What Is to Be Done? Conclusion References Part I Applied Econometrics Chapter 2 A Different Approach to Deriving Price and Income Elasticities: Applications to Telecommunications and Gasoline & Motor Oil Introduction The Basic Framework Derivation of Own- and Cross-Price Elasticities Own- and Cross-Price Elasticities for Telecommunications and Gasoline & Motor Oil Telecommunications Gasoline & Motor Oil Summary and Conclusions Appendices References Chapter 3 A Cross-Country Analysis of ICT Diffusion, Economic Growth, and Global Competitiveness Introduction Literature Review ICT and Growth Magnitude Broadband and Mobile Causality Contribution of This Paper ICT Environment Data Research Plan and Methodology Research Questions Model Specification Granger-Causality Test in Dynamic Panel Data Fixed Effects Model Consistent Estimation of the Dynamic Panel Data Fixed Effects Model Estimation/Results Relationship Between Economic Growth and IDI Relationship Between GDP Per Capita and Alternative Measures of ICT Causal Impacts on Economic Growth Causal Impacts from Economic Growth Discussion of Findings and Conclusions References Chapter 4 Adoption of E-Commerce by Individuals and Digital-Divide Introduction Literature Review Models of ICT Adoption Digital-Divide Internet Use and E-Commerce Adoption Adoption of E-Commerce in Spain The ICT-H Survey: Pooled Data Theoretical and Empirical Models Linear Probability Model Logistic Regression Model Heckman Selection Model Conclusions General Conclusions Policy Recommendations Caveats Further Research Appendix References Part II Forecasting Chapter 5 Predictive Accuracy Tests for Prediction of Economic Growth Based on Broadband Infrastructure Introduction Prediction Model Hypothesis Tests of Predictive Accuracy Results Concluding Remarks References Chapter 6 Modelling Internet Diffusion Across Tourism Sectors Introduction Literature Review Innovation and Imitation Homogenous and Heterogeneous Adoption Critical Thresholds and Exogenous Variables Data and Methodology Results Market Penetration Homogeneity and Heterogeneity Discussion and Conclusion Appendix References Chapter 7 Exploring Drivers of Online Political Participation in the European Union Introduction Literature Review Data Econometric Model and Variables Model Variables Results Discussion of Results and Concluding Remarks References Chapter 8 Machine Learning and Forecasting: A Review Introduction Overview Background Machine Learning Forecasting Theoretical Approaches Forecasting Trouble Machine Learning Difficulties Missing Data Over-Fitting and Vapnik–Chervonenkis Theory Empirical Evidence Case Studies Banking Economics Medicine Other Applications The M3 and M4 Competitions Conclusion References Chapter 9 Stated Consumer Behavior with D-Efficient Choice Set Designs: The Case of Mobile Service Bundles Introduction Traditional Design Methods Efficient Design Choice Context, Experiment, and Sample Implementing the Experimental Design D-Optimality of the Ex Post Model Conclusions References Part III Governance of the Internet Chapter 10 Platforms with Restrictive Licensing Introduction Literature Model Setup Timing Third Stage: Consumers Second Stage: Components First Stage: Platform Equilibrium An Unmanaged Platform A Platform with Restrictive Licenses Extensions and Conclusion Relaxed Restriction Decrease Consumer Price Other Extensions References Chapter 11 QoS Investment, Vertical Integration and Regulation of the Internet Introduction The Model ISP’s Optimal Qualities Under Unregulated Regime Investment Under Non-Discriminatory Regulation Conclusion References Chapter 12 Operations of Internet Platform Intermediaries Introduction Consumer Benefits from Two-Sided Markets Consumer Costs from Two-Sided Markets Subscriber Data Value and Lock-In Cost Missing in the Cost/Benefit Analysis Deficiencies in Existing Government Oversight Models A Realistic Assessment of Platform Costs and Benefits The Way Forward Assess Impacts on Both Sides of a Platform Insights from Ohio v. American Express Consider Whether and How Lock-In Exists Assess Market Impacts, Rather Than Simply Calculate Market Share Conclusion References Chapter 13 Escalating Instability of Network Neutrality Policy in the U.S. Introduction Instability of U.S. Network Neutrality Policy Emergence of Political Dysfunction in the U.S. U.S. Governance Structure of Federalism and the Distinctive Role of the Judiciary Adversarial Legalism Under Divided Government and Party Polarization Phase of Hyperpartisanship Rise of Market Populism as a Political Mythology Rise of the Tea Party Movement and the Mythology of Its Origins Conclusion: Underlying U.S. Political Dysfunction Drives Instability of Network Neutrality Policy Epilogue References Chapter 14 Multisided Markets and Platform Dominance Introduction The Economic Threat of Dominant Internet Platforms Network Externalities The Markets Two-Sided/Multisided Markets Analysis of Harm Monopoly Prices Increase in Product Prices Elimination of Competition Estimation of Welfare Loss Remedies and Solutions Internal Tools: Promises Not Fulfilled Antitrust Regulation: Treat as Utility Data Portability Rate of Return Regulation/Profit Constraints/Price-Caps Summary/Tentative Conclusions References Conclusion Appendix: Gary Madden’s Publications Books Articles Index