spectrum auction

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pages: 389 words: 98,487

The Undercover Economist: Exposing Why the Rich Are Rich, the Poor Are Poor, and Why You Can Never Buy a Decent Used Car by Tim Harford

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Albert Einstein, barriers to entry, Berlin Wall, collective bargaining, congestion charging, Corn Laws, David Ricardo: comparative advantage, decarbonisation, Deng Xiaoping, Fall of the Berlin Wall, George Akerlof, invention of movable type, John Nash: game theory, John von Neumann, market design, Martin Wolf, moral hazard, new economy, price discrimination, Productivity paradox, race to the bottom, random walk, rent-seeking, Robert Gordon, Robert Shiller, Robert Shiller, Ronald Reagan, sealed-bid auction, second-price auction, second-price sealed-bid, Shenzhen was a fishing village, special economic zone, spectrum auction, The Market for Lemons, Thomas Malthus, trade liberalization, Vickrey auction

As part of his talk, Paul Klemperer confiscated the wallets of two members of the audience, counted the money they contained, and then offered to sell that (unknown) sum of money back to whichever of the victims would bid highest. The two members of the audience, put on the spot, were quite unable to work out what the optimal strategy was for bidding in the auction. The difficulty—which is a challenge for bidders in many auctions, including spectrum auctions—is that the two victims just didn’t know the value of what they were bidding for. They knew part of the value, of course, because they knew how much money had been in their own wallet. But each knew nothing about the contents of the other’s wallet. In a spectrum auction, the prob- • 162 • T H E M E N W H O K N E W T H E V A L U E O F N O T H I N G lem is similar: each bidder has his own forecasts and technology plans, but each knows that other bidders will probably have different insights. The optimal strategy would take advantage of any information revealed by other players’ bids—but this is not easy.

Union of Needletrades, Industrial, Vehicle Excise Duties, 82 and Textile Employees vehicle taxes, 82–83 (UNITE), 224 Ven der Beurs family, 201–2 unions, 25–26, 224–25 Venezuela, 23 United Kingdom Venkatesh, Sudhir, 24 air pollution, 81 Vickrey auctions, 164 efficiency vs. fairness, 73 Vietnam, 228–29 fuel prices, 88 village enterprises, 244 health care system, 28, 120, 121, viruses, 184 122, 126, 132 Visudyne, 127, 133 immigration, 28 Vodafone, 173, 174 industrial revolution, 233 Voluntary Service Overseas (VSO), infrastructure, 183 190 railroads, 151 Von Neumann, John, 156, 158, 161– spectrum auctions, 163, 165–68, 62, 167, 175 168–73, 173–75 vouchers, 90 taxation, 82 unions, 26 wages, 24–26, 67, 94 wealth inequality, 89 The Wall Street Crash—And After United States (Fisher), 148–49 exports, 245 Wal-Mart, 26 fuel prices, 88 waste, 192, 233 health care system, 113, 119–23, Waterloo station, 6 122 wealth and wealth inequality industrial revolution, 233 in China, 233, 252 infrastructure, 183 and development, 197–98 pollution, 81, 221 and fairness, 75 and special interests, 227 and nonmarket economies, 69 spectrum rights auctions, 159–61, and price sensitivity, 38 165 and taxation, 71–72 taxation, 82 in the US and UK, 89 • 275 • I N D E X West End, London, 17 world economy, 199 Western Europe, 213 World War II, 73 Western society, 68 Wholefoods, 42, 43–44, 114–15 xenophobia, 212 Why Globalization Works (Wolf), 251 Xi’an, China, 245 Wilde, Oscar, 155 Yahoo!

Eventually the bidding gets to $250,000—you realize that, whatever happens, you’re not going to do too badly. A few days later the bidding reaches $300,000 and you’re smiling. From here on everything is a bonus; maybe you’ll get $310,000, or $320,000, or even $350,000. Who knows? Then the price keeps going up. It hits $320,000. It reaches $350,000. $400,000. $500,000. What’s happening? You can scarcely believe it. This unexpected turn of events is similar to what happened in the UK spectrum auction, except the stakes were ten thousand times higher: not £300,000 but £3 billion. For a week, the bidding went smoothly; the rules about continuous bidding kept the total revenue rising steadily. After about twenty-five rounds of bidding, bidders were committed to around £400 million for each license. After fifty rounds of bidding the total stood at £3 billion: what the government had been hoping to raise.


pages: 494 words: 142,285

The Future of Ideas: The Fate of the Commons in a Connected World by Lawrence Lessig

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AltaVista, Andy Kessler, barriers to entry, business process, Cass Sunstein, computer age, dark matter, disintermediation, Erik Brynjolfsson, George Gilder, Hacker Ethic, Hedy Lamarr / George Antheil, Howard Rheingold, Hush-A-Phone, HyperCard, hypertext link, Innovator's Dilemma, invention of hypertext, inventory management, invisible hand, Jean Tirole, Jeff Bezos, Joseph Schumpeter, linked data, Menlo Park, Network effects, new economy, packet switching, price mechanism, profit maximization, RAND corporation, rent control, rent-seeking, RFC: Request For Comment, Richard Stallman, Richard Thaler, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, Silicon Valley, smart grid, software patent, spectrum auction, Steve Crocker, Steven Levy, Stewart Brand, Ted Nelson, Telecommunications Act of 1996, The Chicago School, transaction costs

.): Hazlett has cataloged the cases where favored interests have succeeded in using their power over regulators to resist new technologies;2 as Noam writes, “[I]n the early 1950s, only newspaper companies that had editorially endorsed Eisenhower for President had a chance at getting a TV license.”3 In the third era (now), the right to use spectrum is increasingly allocated through auctions. The government sells the right to the highest bidder (subject to a scad of typically governmentlike, mainly silly, conditions). That bidder uses the spectrum as the auction specifies or, in a small set of cases, the bidder is then free to reassign the right to others. Politicians from the Left and the Right just love auctions. For the Left, auctions promise more money for the government to spend; for the Right, auctions sound like markets, and markets are always good.

Huber is a brilliant polymath who, while working full-time as a lawyer, has written some of the most important policy and academic work about government regulation in general and telecommunications policy in particular.31 In his book Law and Disorder in Cyberspace, Huber describes both the market model for allocating spectrum—where spectrum rights are auctioned off up front—and the commons model for allocating spectrum, promoted most strongly by an ally of Huber's, George Gilder. As I described in chapter 5, Gilder argues strongly that we should allocate spectrum as a commons. Auctions, Gilder argues, will simply entrench existing uses; free or common spectrum would create a strong incentive for new uses. Huber does not reject Gilder's predications. He argues instead that we could get to Gilder's world of spectrum as a commons by first auctioning off all the spectrum and then allowing the market to “reassemble” the rights if that proves efficient.

See Eli Noam, “The Future of Telecommunications Regulation,” NRRI Quarterly Bulletin 20 (1999): 17; Eli Noam, “Spectrum Auctions: Yesterday's Heresy, Today's Orthodoxy, Tomorrow's Anachronism: Taking the Next Step to Open Spectrum Access,” Journal of Law & Economics 41 (1998): 765; Eli Noam, “Beyond Auctions: Open Spectrum Access,” in Regulators' Revenge: The Future of Telecommunications Deregulation, Tom W. Bell and Solveig Singleton, eds. (Cato Institute, 1998), 1: Eli Noam, “Will Universal Service and Common Carriage Survive the Telecommunications Act of 1996?,” Columbia Law Review 97 (1997): 955; Eli Noam, “Spectrum and Universal Service,” Telecommunications Policy 21 (1997); Eli Noam, “Taking the Next Step Beyond Spectrum Auctions: Open Spectrum Access,” IEEE Communications Magazine 33 (1995): 66 ; Eli Noam, “The Federal-State Friction Built into the 1934 Act and Options for Reform,” in American Regulatory Federalism & Telecommunications Infrastructure, Paul Teske, ed.


pages: 350 words: 103,988

Reinventing the Bazaar: A Natural History of Markets by John McMillan

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accounting loophole / creative accounting, Albert Einstein, Andrei Shleifer, Anton Chekhov, Asian financial crisis, congestion charging, corporate governance, crony capitalism, Dava Sobel, Deng Xiaoping, experimental economics, experimental subject, fear of failure, first-price auction, frictionless, frictionless market, George Akerlof, George Gilder, global village, Hernando de Soto, I think there is a world market for maybe five computers, income inequality, income per capita, informal economy, invisible hand, Isaac Newton, job-hopping, John Harrison: Longitude, John von Neumann, land reform, lone genius, manufacturing employment, market clearing, market design, market friction, market microstructure, means of production, Network effects, new economy, offshore financial centre, pez dispenser, pre–internet, price mechanism, profit maximization, profit motive, proxy bid, purchasing power parity, Ronald Coase, Ronald Reagan, sealed-bid auction, second-price auction, Silicon Valley, spectrum auction, Stewart Brand, The Market for Lemons, The Nature of the Firm, The Wealth of Nations by Adam Smith, trade liberalization, transaction costs, War on Poverty, Xiaogang Anhui farmers, yield management

As it turned out, the government’s estimate was actually too low. In terms of the money it raised and the information it revealed about the spectrum’s true value, the auction was a success. What is the government’s role in spectrum allocation now that auctioning is used? It still has its regulatory function, parceling up the spectrum and coordinating its usage. Without a clear definition of property rights, the spectrum, like anything else, would not be used efficiently. What was turned over to the market was the decision—hard for a government official to make well—of who gets the right to use each piece of spectrum. The main beneficiaries of the spectrum auctions were consumers, who got a speedy introduction of new telecommunication services at competitive prices, and taxpayers, through the revenue generated.

“Every company would get on the phone at night to their headquarters and say, ‘We need more money, we need more money,’” said Kathleen Abernathy of Airtouch Paging. “Back at headquarters, people were crunching the numbers.” The auction went on for a week, raising $617 million for ten licenses covering a tiny sliver of spectrum. Several more auctions were subsequently held, for larger chunks of spectrum to be used for mobile telephones, portable fax machines, and wireless computer networks. After the trial run in the Washington hotel, the FCC ran the auctions electronically. As of early 2001 they had fetched a total of $42 billion. A new market was created with the spectrum auctions. Previously, the government had given the spectrum rights to telephone and broadcasting companies. Initially, licenses were assigned by administrative decision. Prospective license holders filed applications, and the FCC held comparative hearings to decide which applicant was the most worthy.

Every day, thousands of similar scenes recur at internet auction sites—except with a computer program acting as the auctioneer. During the brief history of electronic auctions, from 1994, markets have been created in front of us as entrepreneurs have devised new ways of transacting. The public sector also has turned to using auctions to allocate publicly owned resources like the electromagnetic spectrum. These novel auctions raise some knotty design problems. Economic theory helps us understand how they work, and is being used in designing further new selling mechanisms. Many transactions, such as in a supermarket or a department store, take place at prices fixed by the seller. An auction, by contrast, is interactive: the seller puts the pricing in the hands of the potential buyers and relies on the competition among them to get an acceptable price.


pages: 252 words: 73,131

The Inner Lives of Markets: How People Shape Them—And They Shape Us by Tim Sullivan

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Airbnb, airport security, Al Roth, Andrei Shleifer, attribution theory, autonomous vehicles, barriers to entry, Brownian motion, centralized clearinghouse, clean water, conceptual framework, constrained optimization, continuous double auction, deferred acceptance, Donald Trump, Edward Glaeser, experimental subject, first-price auction, framing effect, frictionless, fundamental attribution error, George Akerlof, Goldman Sachs: Vampire Squid, helicopter parent, Internet of things, invisible hand, Isaac Newton, iterative process, Jean Tirole, Jeff Bezos, Johann Wolfgang von Goethe, John Nash: game theory, John von Neumann, Joseph Schumpeter, late fees, linear programming, Lyft, market clearing, market design, market friction, medical residency, multi-sided market, mutually assured destruction, Nash equilibrium, Occupy movement, Peter Thiel, pets.com, pez dispenser, pre–internet, price mechanism, price stability, prisoner's dilemma, profit motive, proxy bid, RAND corporation, ride hailing / ride sharing, Robert Shiller, Robert Shiller, Ronald Coase, school choice, school vouchers, sealed-bid auction, second-price auction, second-price sealed-bid, sharing economy, Silicon Valley, spectrum auction, Steve Jobs, Tacoma Narrows Bridge, technoutopianism, telemarketer, The Market for Lemons, The Wisdom of Crowds, Thomas Malthus, Thorstein Veblen, trade route, transaction costs, two-sided market, uranium enrichment, Vickrey auction, winner-take-all economy

It’s important to appreciate how big a break this represents from how things used to be done, when there was a standard toolkit that sellers, whether private or public, used to unload their goods. And within the narrow set of options available, it’s not even clear how much thought went into the decision of whether to use, say, a lottery or an English auction. One oft-cited example of auction theory’s triumph is the wireless spectrum auction of 1995. Previously, the Federal Communications Commission had in fact relied on a lottery: you applied for a cellular license in a particular locale, and if your number came up, you were the proud owner of spectrum somewhere in America. This might have been fair, since everyone had the same shot at getting each license, but it didn’t generate much revenue for the government. Nor was it efficient, since it was generally more profitable to own licenses that were clustered geographically.

Nor was it efficient, since it was generally more profitable to own licenses that were clustered geographically. The lottery might leave a spectrum owner with licenses in, say, Albuquerque and Albany, and he’d then have to find some way of swapping his Albany license for one in Santa Fe. (It also created a boon for Washington law firms that created “phone companies” for the sole purpose of bidding on licenses.17) When the FCC opened up the process to proposals from auction theorists, the resulting spectrum auction in 1995 involved a book-length set of rules describing the various contingencies and stipulations of participating in the spectrum sale. But the complications generated a big payday for Uncle Sam. The auction mechanism that Stanford economists Paul Milgrom and Robert Wilson proposed generated revenues of more than $7 billion. The end result was a richer government and a more efficient world.

As he told Binyamin Appelbaum of the New York Times after his prize had been announced: “There’s no easy line in summarizing my contribution and the contribution of my colleagues. . . . The way you regulate payment cards has nothing to do with the way that you regulate intellectual property or railroads. . . . It’s not a one line thing.”12 Tirole also embodies the increasing incursion of economic theory into the functioning of markets economists study as they find themselves advising Silicon Valley companies and designing government health-care exchanges and spectrum auctions. Despite his low profile, Tirole’s advice is much sought after by the companies that are the object of his study: it’s of immense value to businesspeople to talk with someone who can strip a complicated situation down to its bare essentials, whether expressed in algebra or prose. The dense mathematics of his academic papers has served as a basis for regulatory policies on telecommunication networks.


pages: 678 words: 216,204

The Wealth of Networks: How Social Production Transforms Markets and Freedom by Yochai Benkler

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affirmative action, barriers to entry, bioinformatics, Brownian motion, call centre, Cass Sunstein, centre right, clean water, dark matter, desegregation, East Village, fear of failure, Firefox, game design, George Gilder, hiring and firing, Howard Rheingold, informal economy, invention of radio, Isaac Newton, iterative process, Jean Tirole, jimmy wales, market bubble, market clearing, Marshall McLuhan, New Journalism, optical character recognition, pattern recognition, pre–internet, price discrimination, profit maximization, profit motive, random walk, recommendation engine, regulatory arbitrage, rent-seeking, RFID, Richard Stallman, Ronald Coase, Search for Extraterrestrial Intelligence, SETI@home, shareholder value, Silicon Valley, Skype, slashdot, social software, software patent, spectrum auction, technoutopianism, The Fortune at the Bottom of the Pyramid, The Nature of the Firm, transaction costs

For more than half a century, radio communications regulation was thought necessary because spectrum was scarce, and unless regulated, everyone would transmit at all frequencies causing chaos and an inability to send messages. From 1959, when Ronald Coase first published his critique of this regulatory approach, until the early 1990s, when spectrum auctions began, the terms of the debate over "spectrum policy," or wireless communications regulation, revolved around whether the exclusive right to transmit radio signals in a given geographic area should be granted as a regulatory license or a tradable property right. In the 1990s, with the introduction of auctions, we began to see the adoption of a primitive version of a property-based system through "spectrum auctions." By the early 2000s, this system allowed the new "owners" of these exclusive rights to begin to shift what were initially purely mobile telephony systems to mobile data communications as well. 178 By this time, however, the century-old engineering assumptions that underlay the regulation-versus-property conceptualization of the possibilities open for the institutional framework of wireless communications had been rendered obsolete by new computation and network technologies. 28 The dramatic decline in computation cost and improvements in digital signal processing, network architecture, and antenna systems had fundamentally changed the design space of wireless communications systems.

Eli Noam was the first to point out that, even if one did not buy the idea that computationally intensive radios eliminated scarcity, they still rendered spectrum property rights obsolete, and enabled instead a fluid, dynamic, real-time market in spectrum clearance rights. See Eli Noam, "Taking the Next Step Beyond Spectrum Auctions: Open Spectrum Access," Institute of Electrical and Electronics Engineers Communications Magazine 33, no. 12 (1995): 66-73; later elaborated in Eli Noam, "Spectrum Auction: Yesterday's Heresy, Today's Orthodoxy, Tomorrow's Anachronism. Taking the Next Step to Open Spectrum Access," Journal of Law and Economics 41 (1998): 765, 778-780. The argument that equipment markets based on a spectrum commons, or free access to frequencies, could replace the role planned for markets in spectrum property rights with computationally intensive equipment and sophisticated network sharing protocols, and would likely be more efficient even assuming that scarcity persists, was made in Benkler, "Overcoming Agoraphobia."

Eli Noam was the first to point out that, even if one did not buy the idea that computationally intensive radios eliminated scarcity, they still rendered spectrum property rights obsolete, and enabled instead a fluid, dynamic, real-time market in spectrum clearance rights. See Eli Noam, "Taking the Next Step Beyond Spectrum Auctions: Open Spectrum Access," Institute of Electrical and Electronics Engineers Communications Magazine 33, no. 12 (1995): 66-73; later elaborated in Eli Noam, "Spectrum Auction: Yesterday's Heresy, Today's Orthodoxy, Tomorrow's Anachronism. Taking the Next Step to Open Spectrum Access," Journal of Law and Economics 41 (1998): 765, 778-780. The argument that equipment markets based on a spectrum commons, or free access to frequencies, could replace the role planned for markets in spectrum property rights with computationally intensive equipment and sophisticated network sharing protocols, and would likely be more efficient even assuming that scarcity persists, was made in Benkler, "Overcoming Agoraphobia."


pages: 998 words: 211,235

A Beautiful Mind by Sylvia Nasar

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Al Roth, Albert Einstein, Andrew Wiles, Brownian motion, cognitive dissonance, Columbine, experimental economics, fear of failure, Henri Poincaré, invisible hand, Isaac Newton, John Conway, John Nash: game theory, John von Neumann, Kenneth Rogoff, linear programming, lone genius, market design, medical residency, Nash equilibrium, Norbert Wiener, Paul Erdős, prisoner's dilemma, RAND corporation, Ronald Coase, second-price auction, Silicon Valley, Simon Singh, spectrum auction, The Wealth of Nations by Adam Smith, Thorstein Veblen, upwardly mobile

Coase, “The Federal Communications Commission,” Journal of Law and Economics (October 1959), pp. 1–40, quoted by John McMillan, “Selling Spectrum Rights,” Journal of Economic Perspectives, vol. 8, no. 3 (Summer 1994). 15. Peter C. Cramton, “The PCS Spectrum Auction: An Early Assessment,” The Economist (August 25, 1995). 16. Milgrom, Auction Theory for Privatization, op. cit. 17. Ibid. See also McMillan, “Selling Spectrum Rights,” op. cit., pp. 153–55. 18. Ibid. 19. See, for example, McMillan, “Selling Spectrum Rights,” op. cit.; Paul Milgrom, “Game Theory and Its Use in the PCS Spectrum Auction,” Games ’95, conference, Jerusalem, 9.29.95. 20. Milgrom, Auction Theory for Privatization, op. cit. 21. Ibid. 22. Ibid. 23. Ibid. 24. McMillan, “Selling Spectrum Rights,” op. cit. 50: Reawakening 1. Sylvain Cappell, interview, 2.29.96. 2.

Designing an auction to allow this is quite difficult,” writes Paul Milgrom, one of the economists who designed the FCC auction of which Gore was speaking.17 A second source of complexity, Milgrom says, is that the purpose of the licenses is to create businesses for new services with unknown technology and unknown consumer demand. Since bidders’ opinions are bound to be wildly divergent, it is possible that license assignment would depend more on bidders’ optimism than on their ability to create a desired service.18 Ideally, an auction design can minimize that problem. As Congress and the FCC inched closer to the notion of auctioning off spectrum rights, Australia and New Zealand both conducted spectrum auctions.19 That they proved to be costly flops and political disasters illustrated that the devil really was in the details. In New Zealand, the government ran a so-called second price auction, and newspapers were full of stories about winners who paid far below their bids. In one case, the high bid was NZ$7 million, the second bid NZ$5,000, and the winner paid the lower price. In another, an Otago University student bid NZ$1 for a television license in a small city.

The FCC hired another game theorist, John McMillan, of the University of California at San Diego, to help evaluate the effect of every proposed rule. According to Milgrom, “Game theory played a central role in the analysis of the rules. Ideas of Nash equilibrium, rationalizability, backward induction, and incomplete information, though rarely named explicitly, were the real basis of daily decisions about the details of the auction process.”23 By late spring 1995, Washington had raised more than $10 billion from spectrum auctions. The press and the politicians were ecstatic. Corporate bidders were largely able to protect themselves from predatory bidding and were able to assemble an economically sensible set of licenses. It was, as John McMillan said, “a triumph for game theory.”24 50 Reawakening Princeton, 1995–97 Mathematics is a young man s game. Yet it is not bearable to contemplate a brief distinction and burgeoning of activity... followed by a lifetime of boredom


pages: 282 words: 80,907

Who Gets What — and Why: The New Economics of Matchmaking and Market Design by Alvin E. Roth

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Affordable Care Act / Obamacare, Airbnb, algorithmic trading, barriers to entry, Berlin Wall, bitcoin, Build a better mousetrap, centralized clearinghouse, computer age, crowdsourcing, deferred acceptance, desegregation, experimental economics, first-price auction, Flash crash, High speed trading, income inequality, Internet of things, invention of agriculture, invisible hand, Jean Tirole, law of one price, Lyft, market clearing, market design, medical residency, obamacare, proxy bid, road to serfdom, school choice, sealed-bid auction, second-price auction, second-price sealed-bid, Silicon Valley, spectrum auction, Spread Networks laid a new fibre optics cable between New York and Chicago, Steve Jobs, The Wealth of Nations by Adam Smith, two-sided market

The auction design also had another problem to solve: for the market to do its job, bidders had to be willing to bid, even though doing so risked revealing confidential information to competitors. Bidders reluctant to share their intentions would want to wait until near the end of the auction before bidding, as we saw in chapter 7 when we considered sniping in eBay auctions. But if everyone waited, the information needed to produce an efficient allocation wouldn’t be transmitted. To avoid this, the design for the spectrum auction included activity rules, proposed by my colleagues Paul Milgrom and Bob Wilson, to prevent bidders from making late bids unless they had made bids on equivalent numbers of licenses (measured in terms of population served) earlier in the auction. Thus big bidders had to make their bids known early, and all bidders could adjust their bids in light of the competition. Simultaneous ascending auctions with activity rules enabled many bidders to compete simultaneously for many licenses, creating a thick market in which price discovery could take place.

But if you use the Web a lot, you would have to work pretty hard to stay completely private on your own. And it’s not just your behavior online. The map software on your smartphone knows not only where you are but where you’re going. Even your cell phone company has to know where you are whenever your phone is turned on, in order to be able to route calls to you, using the local radio spectrum license it bought at auction for that purpose. So it might be, as all this new technology impinges on our privacy, that we’ll want legal restrictions on some kinds of transactions involving our private data. Property rights—who owns what, and what they can do with it—are an important part of market design, and I predict that we’ll be seeing some new efforts to define the property rights to our transaction data.

See also repugnant markets NEPKE, 8, 37, 38, 42, 44, 49, 50 New England Journal of Medicine, 45 New England Organ Bank, 36 New England Program for Kidney Exchange (NEPKE), 8, 37, 38, 42, 44, 49, 50 New York City school system, 8, 106–10, 112, 122, 153–61 benefits of revised, 160–61 old compared with new, 155–58 preferences in, 153–54, 156–60 New York State attorney general, 86, 88 New York Stock Exchange, 82–83 New York Times, 110 Nguyen, Hai, 38–39 Niederle, Muriel, 75–76, 176–77 Nixon, Richard, 224 nonsimultaneous chains in kidney exchange, 43–46, 49, 51–52, 235 NRMP, 7–8, 146 Obamacare, 224 objectification, 203 Ockenfels, Axel, 118, 120–21 Oklahoma Land Rush, 57–59, 80, 113–14 once-per-second market, 86, 88 OpenTable, 218 operating systems, 21–22 Orange Bowl, 61–62, 66 orthopedic surgeons, 78–80 Ostrovsky, Mike, 86–87 package bidding, 188–89, 225–26 parking decisions, 72–73, 125–26 Pathak, Parag, 107, 126, 149, 153, 165 payment systems credit cards, 23–26 in Internet marketplaces, 24, 104, 117 mobile, 26–27 privacy in, 119 PayPal, 24, 117, 119 Payzant, Tom, 126, 129 peacocks, 177–78 penicillin, 133–34 Peranson, Elliott, 147–48, 157 performance evaluation, 64 political campaign contributions, 203 politics free markets and, 226–28 in kidney exchanges, 49–51 polycystic kidney disease, 38–39 polygamy, 199 Posner, Richard, 91 price and pricing, 9. See also payment systems in auctions, 181–89 discovery of, 185–89 school choice systems and, 151 speed-based competition vs., 85–88 unfair, consumer perception of, 25 privacy, 119–22, 191–92 Prohibition, 197–98, 213 property rights, 192, 222 protected transactions, 198 Protestant Ethic and the Spirit of Capitalism, The (Weber), 200–201 radio spectrum license auctions, 185–89 real estate markets, 111 easy vs. hard matches in, 47–48 packages in, 186 real estate brokers in, 224–25 Redfin, 225 Rees, Michael, 29–31, 32, 39, 44–46, 49, 147–48 regulation, 222–23 central planning and, 7, 149–50, 166–67 of financial markets, 85 free markets and, 226–28 of legal vs. illegal markets, 207 Oklahoma Land Rush and, 57–59 repugnant markets and, 11–12 of restaurants, 220–22 of unraveling markets, 68 reliability, 116, 118–19 religious freedom, 198 repugnant markets, 6, 11–12, 192, 195–215 banning vs. controlling, 212–15 definition of, 196 demand vs. supply and, 205–7 disgust compared with, 196–97 for horsemeat, 195–97 kidney transplants and, 205–12 legal, 197–98, 208–9 market design and, 205–7 in marriage, 198–99 organ sales as, 6, 12, 46 slavery as, 199–200 technology in creating, 201–2 time and place sensitivity of, 196–97, 198–201, 204–5 reputations, 115–16.


pages: 339 words: 105,938

The Skeptical Economist: Revealing the Ethics Inside Economics by Jonathan Aldred

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airport security, Berlin Wall, carbon footprint, citizen journalism, clean water, cognitive dissonance, congestion charging, correlation does not imply causation, Diane Coyle, experimental subject, Fall of the Berlin Wall, first-past-the-post, framing effect, greed is good, happiness index / gross national happiness, invisible hand, job satisfaction, John Maynard Keynes: Economic Possibilities for our Grandchildren, labour market flexibility, laissez-faire capitalism, libertarian paternalism, new economy, pension reform, positional goods, Ralph Waldo Emerson, RAND corporation, risk tolerance, school choice, spectrum auction, trade liberalization, ultimatum game

Examples include the auctions of government debt and mobile phone radio frequencies, the new markets trading in carbon emissions allowances, and some specialized financial markets. In these fields, economic theory has been applied fairly directly to yield useful insights and policy recommendations, without generating difficult ethical dilemmas. Indeed, the influence of economics goes further: in some cases, economists have not just given advice, but devised the entire framework in which economic activity takes place. The mobile phone spectrum auctions and specially designed carbon trading markets only exist because economists invented them. So it is hardly surprising that economics works well in these contexts.3 They are selfcontained closed systems in which the decision makers involved have the time, ability and financial incentives to act like Homo economicus. When businesses and governments buy and sell carbon credits or mobile phone spectra, they have a great deal to gain or lose from the transaction and so devote considerable efforts to making the right decisions.

Land Economics 73: 492-507 Index ability to pay 87 absolute consumption 58-59 accountability 199, 205-206, 230 see also audit culture adaptation 23-24, 25, 237 and increasing happiness 66-67, 98, 140-141 to economic growth 55-57, 61-62 addictive consumption 22-24, 98 advertising brand recognition 16 consumer sovereignty 19-21 increased choice 41 restricting 236-237 affluenza 3, 235-238 altruism see unselfish behaviour animal lives 160 Aristotle 134, 135 audit culture 192-198, 202, 204-205 availability 15-16, 122 babies, markets in 181, 209 Baumol’s cost disease 68-74, 78, 237-238 affordability of personal services 74-77, 191 Baumol, William 68, 75, 76, 77 Bayesianism 164-166, 178, 224-225 Bayes, Thomas 164 Becker, Gary 27, 34 behavioural economics 26, 232-233, 234 belief 13 benefit transfer 157 Bentham, Jeremy 120-121, 130-131, 135 best practice 201, 202 Bewley, Truman 229 biodiversity 160 black box economics 1-2, 4 Blanchard, Oliver 48 Blinder, Alan 232 blood donation 33, 197, 217 body shape and weight 42 brand recognition 16, 21 Breyer, Stephen 156 Broome, John 154 Bush, George W. administration 146, 153, 156 capital investment 168 capital punishment 215-216 Caplan, Bryan 226-227 carbon trading markets 222, 223 cars advertising 20 ownership 42-43, 63 catastrophe, precautionary principle 173 charitable giving 27, 28, 33-34 choice 25-26 costs to consumers 39, 191 economic analysis 12-14, 25-26, 43-44 increasing options 39-43, 182-184, 192 inequalities of 43, 189-190, 209-210 ofjobs 101-102 psychologist analysis 14-19 in public services 184-186, 188-192, 205 rational 11-12, 21, 28, 164-165 see also decision making choice advisers 191 citizen’s income 97 citizens’ juries 214, 215 climate change 2, 21, 146, 147-151, 159, 218 precautionary principle 173 valuing the future 161, 162 commodification 179-181, 206-216 alternatives to CBA 213-216 limits to monetary valuation 216-219 meaning of monetary valuation 207-210 rational decision making 211-213 commuters 56, 57 compensation argument for rates of pay 99-103, 105 competitive consumption 24-25, 57-62, 62-63 congestion 60-61 consumers 11-45 addictive consumption 22-24, 98 choice in public services 182-192 competitive consumption 24-25, 57-62, 62-63 preference satisfaction 37-43 rational choice 11-12 self-interest 26-36 shopping 12-19 sovereignty myth 19-22, 25, 156, 158, 225 consumption future 168 see also consumers context-specific valuation of risk 157-158 contingent valuation surveys 152, 157 contracts 203-204 contribution argument for rates of pay 103-108 coordination problem 63 cost-benefit analysis (CBA) 145-178 alternatives to 173-174, 213-216 best practice 201, 202 climate change 2, 146, 147-151, 159 determining preferences 39 of emotions 30-31 limits to monetary quantification 175-178 valuing the future 161-173 valuing human life 147-148, 151-160, 209 valuing nature 160-161 Coyle, Diane 2 cream-skimming 189-190, 210 cultural differences in perception of happiness 118-120 cultural value 207 Damasio, Antonio 44 decision making 174, 175, 176-177, 211-214 see also cost-benefit analysis (CBA) declining discount rates 169-170 democracy and accountability 199, 206, 230 and CBA 172-173, 176-177, 214 economics as 225, 227-228 valuing life 158-159 see also politics deserving what we earn 99-109 desire 13 Dickens, Charles 138 digital TV 41, 42 diminishing marginal utility 95, 158-159 disappointment 41 discounting 149, 166-173, 176, 178, 226, 234 doctors 2, 70, 91, 106-107 decisions on behalf of patients 186-187 drugs 128 earnings 79-80 differences in 99-109 personal services sector 70-71 see also performance-related pay (PRP); taxation economic growth 47-78, 168, 170 adaptation to 55-57, 61-62 affordability of personal services 74-77 alternative form of 236-238 and consumer sovereignty 21-22 and happiness 48-55, 61-62, 66-68, 141-142 meaning and measurement of 64-66 rivalry 57-62, 62-63 self-help 62-64 and taxation 88, 89 and work 235-236 see also Baumol’s cost disease economic imperialism 180, 222-223, 233 ecosystem services 160-161 education as a positional good 60-61, 190 reflected in pay 100, 105, 106 to enable pursuit of a good life 136, 236 education services 69, 237-238 choices 185-186 goals 202 inequality 189 supply and demand 190 efficiency 4-6, 8, 177 personal services 75, 191 taxation 93, 94, 95-98, 111-112, 237 effort 108 Ellsberg Paradox 164-165 emotions and choosing public services 185 and complex choices 40-41, 42 and monetary incentives 197 and prediction of satisfaction 16 and self-interest 30-31 employment 48, 53, 142, 235-236 Environmental Protection Agency (US) (EPA) 151 ethics 7-9, 224-228, 239 consumers 34-36, 37-38, 44 desert 108 and efficiency 5-6, 112 impartiality across generations 166-167, 171-172 limits to monetary valuation 216-219 monetary value for human life 150, 159-160 personal 138 principled disagreement 201-202 for public policy 133-139, 140-141, 142, 177, 234 view of discount rates 170-171 Experience Machine 127 Experience Sampling Method 123,124 fairness and efficiency 94-98 framing effects 14-15, 16, 18, 197 Frank, Robert 56 Freakonomics 1, 31-32, 34, 233 free trade 5-6 Friedman, Milton 7 future generations, discounting 166-167, 168-169, 171-172 future outcomes discounting 149, 166-173 precautionary principle 173-174 see also probabilities gambling games 164 game theory 222, 233 goals happiness 125, 126, 129-133 monetary incentives 200-201 for public services 199, 201-202 self interest 17, 37 Goodhart’s Law 141, 192, 194, 202, 223-224 governments auditing public services 203-204 consumer sovereignty 30, 38, 186 economic growth 47-48, 49, 68 Greatest Happiness principle 137-138 policy and CBA 150, 154, 157, 160, 172-173, 175, 215-216 policy for maximizing happiness 141-143 rights of ownership 81-82, 84-85 setting priorities 210 trust in 230-231 Greatest Happiness principle 127-133, 136-138 growth paths 65, 66 guilt 27, 28, 30-31 habitat destruction 160 Hahn, Robert 163 happiness 113-143 adaptation to material improvement 55-57 defining 114-116, 120-121, 134 and economic growth 48-55, 61-62, 66-68 maximized through extending choice 183 maximized through pay incentives 109 maximized through taxation 94-98 measurement of 53-54, 116-126, 139-140, 141, 224 philosophy of 126-133 and public ethics 133-139 as public policy 140-143 of service providers 191 happiness economics 50-55, 64, 78, 115, 122 alternative form of economic growth 236-237 and politics 137-138, 141-143 happiness treadmill 23, 24, 55 see also satisfaction treadmill Harrod, Sir Roy 59 Hayeck, Friedrich von 27-28 health insurance (US) 189-190 health services 69, 71-72, 237-238 difficulty in choosing 184-185 inequality in 189-190 productivity improvements 70, 74 see also doctors Heckman, James 188 higher pleasures 130-131, 135-136 Hirsch, Fred 59, 63 holiday entitlements 58, 59 holidays 17 Homo economicus 27, 29-36, 44, 111,178 and behavioural economics 232 determining preferences 39 location in brain 225-226 self-fulfilling assumption 224 service providers 187 and trust 230-231 useful context for 222-223 hours of work 91-92, 105, 108 House of Lords (UK) report on climate change 148, 150 human life discounting 168 monetary value of 21, 147-148, 151-160, 207-208 Quality-Adjusted Life Years 176 Hume, David 129 identity 24-25, 42, 154 ignorance 162 incentive to work 89-92, 104, 109 and tax 109-112 see also audit culture; monetary incentives income adaptation to 23-24 and happiness 52-54 relative 57-58, 59-60, 62 see also earnings; taxation income effect 91, 92 income tax see taxation inconspicuous consumption 59 inefficiency see efficiency inequality acceptability of 79-80 and choice in public services 188-190, 209-210 effect on happiness 54 rates of pay 99-109 information for consumers advertising 19-20 complexity in public services 184-185 inheritance 81, 86, 99 genetic 101, 108 in-kind valuations 213—214 intellectual diversity 229 interest rates 167—168, 169 Intergovernmental Panel on Climate Change (IPCC) 147-148, 158 internet 43 interpersonal utility comparisons 49-50 Israeli day-care centres study 32 Japan, economic growth and happiness 52 Jefferson, Thomas 130 Jevons, William Stanley 49 job centre case workers 188, 202 Kahneman, Daniel 25-26, 124 objective happiness 114, 121, 125, 126 Peak-End evaluations 17, 122, 125 Keynes, John Maynard 6, 177, 235 Kyoto Protocol 146, 148 labour costs see Baumol’s cost disease labour market 5, 72, 142 language 87, 239 and reporting happiness 116-117, 118-119 law-breakers 34-35 Layard, Richard 121, 126, 137 alternative form of economic growth 236-237 Greatest Happiness principle 129-130, 132-133 happiness drugs 128 Le Grand, Julian 184, 186, 187, 188-189, 195-198 libertarianism view of taxation 82, 84, 86 widening choice 183, 205 libertarian paternalism 227-228 life expectancy 54 limited edition products 60 Locke, John 84 lost wallets 27, 28, 30 love 27, 208 luck and responsibility 105-106 marginal tax rates 96-97 market imperfections 218 market prices 33, 107 market rates of pay 99 compensation argument 100-101, 102, 103 contribution argument 103, 104, 106-107 putting a value on human life 147-148, 152-155 mental illness 3, 42, 54 Mill, John Stuart 130-131, 135-136, 183 mobile phone spectrum auctions 222 monetary incentives 30, 31-33, 195-198, 217 public services 200-201 see also performance-related pay (PRP) monetary quantification see commodification; cost benefit analysis (CBA) money corrosive effects of 209 see also monetary incentives mood 121-122, 125 moral convictions 217 motivation intrinsic 33, 195, 197, 200-201 public service staff 186-188, 191-198, 199, 200-201, 206 see also self-interest; status seeking national product 64-65, 70 natural talents 99, 101, 102, 105 nature ownership rights 210 putting a value on 160-161, 208, 213-214 neuroscience 50, 115-116, 117-118, 225-226 news media current perceptions of economics 6-7 doctrine of self-interest 34 silence on Baumol’s cost disease 68-69, 77 Nietzche, Friedrich Wilhelm 119 non-economic impacts 7 non-renewable resources 168 Nozick, Robert 127 Nussbaum, Martha 131 objective happiness 114, 121, 125, 126, 127 objective list theories 134-136 optimal tax theory 95-98 optimization 233 options 13-16 increasing 39-43, 182-184, 192 ownership principle 80-87, 218 pay see earnings; performance-related pay (PRP) Peak-End evaluation 17-18, 122, 125-126 perceived happiness 140 perfect preferences 37-39, 43, 135-136 performance-related pay (PRP) 33, 193-194, 195-198, 200, 237 performative contradiction 231 performative economics 223-224 personal services 69-77, 237-238 Peter the plumber 92-93 pleasure 22-23, 130-131, 134, 135 policy entrepreneurs 1-2 political economics 230-231, 233 political forums 214, 215 politics democracy and CBA 172-173, 177, 215 and happiness economics 137-138, 141-143 poll taxes 93-94 positional goods 59-61, 63, 190, 236, 237 post-tax distribution 85—86, 87, 98 precautionary principle 173—174 preferences 13, 14, 135—136, 225 and advertising 19—20 of future generations 168-169 pure time 166-167, 172 revealed by choices 21, 64 risk 156, 159, 176 satisfaction 37-43 pre-tax economic activity 92-93, 94 pre-tax income 80-84 pricelessness 209, 210 principled disagreement 201-202 priorities audit culture 193, 202 government policy 38, 50, 141,142 private property 80-81 probabilities 150, 154, 155, 161-162, 164-166 productivity 65-66 high earners 96-97 personal services 70-72, 73-74, 75-76 and taxation 88, 89, 90 progressive tax systems 96, 97 psychological well-being (PWB) 134-135 psychology 14-19 see also behavioural economics public opinion 214 public perception of risk 153, 155-156 public service ethos 194, 199-201, 205, 210,219 public services 68, 74-75, 180 affordability 74-77, 237-238 and attitudes to taxation 110-111 audit culture 192-198 complexity and importance 184-185 distinctiveness of 198-206, 216-217 ensuring real choice 188-192 implications of choices for others 185-186 motivation of service providers 186-188, 191-198, 199, 200-201, 206 trust 203-206 widening choice 182-184 see also Baumol’s cost disease pure time preference 166-167, 172 qualitative factors 163 Quality-Adjusted Life Years 174 quality of life 3, 236 measurement of 49-50, 50-55 and public ethics 135-139 quantifying the unquantifiable 162-166 targets 193 Ramsey, Frank 167 rational choice 11-12, 21, 28, 164-165 see also decision making Rawls, John 99, 101, 102 redistribution 86, 88, 92-94 maximization of happiness 95-98 Rees, Bill 232 regret 41, 42 relationships, putting a value on 208 relative consumption 58-59, 61 relative income 57-58, 59-60, 62 research objectives and methods 228-230 responsibility 41, 100, 105 rights 82, 83, 181, 210, 218 rigour in research methods 229 risk monetary value of 21, 151-158, 178, 211 versus uncertainty 161-166 rivalry 24-25, 57-62, 62-63, 237 and increasing happiness 66-67, 98 sacrifice 196 satisfaction treadmill 125, 126, 140 see also happiness treadmill scarcity 59-61, 106-107 science and economics 1, 8, 50, 224, 225,227, 228-230 Greatest Happiness principle 131-133 see also neuroscience self-control 18-19 self-help 62-64 self-interest 12, 13, 17-19, 26-36 and consumer sovereignty 21-22 politicians and economists 230-231 public service providers 187, 188 self-fulfilling assumptions of 31-34, 223 self-reported happiness see surveys, happiness Sen, Amartya 132, 136, 234 Shaw, George Bernard 208, 210 shopping 11, 12 addiction and compulsion 22-26 economist perspective 12-14 psychologist perspective 14-19 smiley-face sampling 124, 130 smiling 119-120 Smith, Adam 6 smoking 18-19, 132, 135 spare capacity in public services 190 standard of living 48 state benefits 85-86 statistical lives 151-152, 154, 207-208 status anxiety 24-25 status seeking 58-61, 62-63, 236 Stern Review 148-149, 150, 166 substitution effect 91, 92, 96 subtractive method 117 supply and demand in public services 189, 190 rates of pay 100, 101, 105, 106 surveys 214 contingent valuation 152, 157 happiness 53-54, 114-115, 116-117, 118-124, 130, 137 public services users 182 sustainability 171 sustainable development 173 Sutton, Willie 34 targets see audit culture taxation 76, 79-98 cigarettes 132 effect on work 88-92 evasion 35 incentive to work 109-112 ownership principle 80-87 redistribution 86, 88, 92-94 to maximize happiness 94-98, 237-238 teachers 70 team working 193, 194 technical innovation 65, 70, 73-74 theory and self-fulfillment 223-224 Titmuss, Richard 33 trade-offs 13 complex choices 40-41 economic growth 63-64 life 160, 211 taxation 94, 95, 97 The Truman Show 127 trust 203-206, 230-231 TWA Flight 800 163 ultimatum game 29, 33-34 uncertainty and the precautionary principle 173 and risk 161-166 unselfish behaviour 27-28, 29 reaction to manipulation 31-32 service providers 187-188 utilitarianism 120-121, 126-133, 135,136,138-139, 183 Uttal, William 117 value judgements see ethics value for money 212 veto economics 2-3, 6, 227 Viscusi, Kip 153 volunteers 195 wage differentials 152-153, 157 Weitzman, Martin 169 work and employment 235-236 hours of 91-92, 105, 108 see also incentive to work worker inputs and outputs 104-105 Table of Contents Contents Acknowledgements Chapter One - Introduction: Ethical Economics?


pages: 532 words: 139,706

Googled: The End of the World as We Know It by Ken Auletta

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23andMe, AltaVista, Anne Wojcicki, Apple's 1984 Super Bowl advert, bioinformatics, Burning Man, carbon footprint, citizen journalism, Clayton Christensen, cloud computing, Colonization of Mars, corporate social responsibility, death of newspapers, disintermediation, don't be evil, facts on the ground, Firefox, Frank Gehry, Google Earth, hypertext link, Innovator's Dilemma, Internet Archive, invention of the telephone, Jeff Bezos, jimmy wales, Kevin Kelly, knowledge worker, Long Term Capital Management, Mark Zuckerberg, Marshall McLuhan, Menlo Park, Network effects, new economy, Nicholas Carr, PageRank, Paul Buchheit, Peter Thiel, Ralph Waldo Emerson, Richard Feynman, Richard Feynman, Sand Hill Road, Saturday Night Live, semantic web, sharing economy, Silicon Valley, Skype, slashdot, social graph, spectrum auction, stealth mode startup, Stephen Hawking, Steve Ballmer, Steve Jobs, strikebreaker, telemarketer, the scientific method, The Wisdom of Crowds, Upton Sinclair, X Prize, yield management

Ivan Seidenberg, the CEO of Verizon, disputed Google’s contention that his was a closed system: “Since we think we have the most reliable network, we’ll publish standards and let people connect to any device they want to.” The FCC sided with Google, and in July 2007 ruled that the telephone companies could not control what applications were used on this new spectrum. Soon after the FCC announcement, Google raised the stakes by threatening to bid in the January 2008 spectrum auction, establishing itself as a telephone company. Google had no intention of providing telephone service or producing hardware for a Google phone. They would not say this publicly, however, because by fanning speculation—and the speculation was incendiary—they kept people guessing and increased their leverage over the wireless telephone companies. They also brought themselves closer to achieving three objectives: to make Google programs, including such new features as voice search, work on wireless devices; to reduce the cost of mobile phone service and Internet connections by allowing advertisers to subsidize them; and to extend to mobile devices the company’s dominance in online advertising.

At Apple board meetings, Schmidt told me he now recused himself from mobile phone discussions. In the auction, that commenced in January, all bidders were instructed not to reveal their bids. When it was over, Verizon and AT&T had won, paying a total of $16.2 billion for two wide swatches of spectrum. In an April “all hands” meeting with Google employees, either attending or on a video hookup, Schmidt confessed, “We had the very good fortune of entering the spectrum auction for $4.6 billion, and not winning. We sweated it out!” Both Verizon and AT&T would pledge to open their networks. AT&T announced that it would sell phones with Google’s Android system, and Verizon announced that it was open to consider any Android prototype. (By the summer of 2009, Verizon had yet to submit an Android application; nor had any phone company, save T-Mobile.) One former federal official was cynical about what he called Google’s “fake bid.”


pages: 415 words: 125,089

Against the Gods: The Remarkable Story of Risk by Peter L. Bernstein

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Albert Einstein, Andrew Wiles, Antoine Gombaud: Chevalier de Méré, Big bang: deregulation of the City of London, Bretton Woods, buttonwood tree, capital asset pricing model, cognitive dissonance, Daniel Kahneman / Amos Tversky, diversified portfolio, double entry bookkeeping, Edmond Halley, Edward Lloyd's coffeehouse, endowment effect, experimental economics, fear of failure, Fellow of the Royal Society, Fermat's Last Theorem, financial deregulation, financial innovation, full employment, index fund, invention of movable type, Isaac Newton, John Nash: game theory, John von Neumann, linear programming, loss aversion, Louis Bachelier, mental accounting, moral hazard, Nash equilibrium, probability theory / Blaise Pascal / Pierre de Fermat, random walk, Richard Thaler, Robert Shiller, Robert Shiller, spectrum auction, statistical model, The Bell Curve by Richard Herrnstein and Charles Murray, The Wealth of Nations by Adam Smith, trade route, transaction costs, tulip mania, Vanguard fund

Two licenses would be issued for each of 51 zones around the country; no bidder could acquire more than one license in any zone. The usual procedure in such auctions is to call for sealed bids and to award the contract to the highest bidders. This time, acting on the advice of Paul Milgrom, a Stanford University professor, the FCC chose to conduct the auction according to game theory, calling it a "Spectrum Auction." First, all bids would be open, so that each contestant would always know what all the others were doing. Second, there would be successive rounds of bidding until no contestant wanted to raise its bid any higher. Third, between rounds, contestants could switch their bid from one zone to another or could bid simultaneously for licenses in adjoining zones; since there is an economic advantage in having licenses in adjoining zones, a particular license might be worth more to one party than it would be to another.

The highest bidder in an auction of this kind often suffers what is known as the Winner's Curse-overpaying out of a determination to win. The Winner's Curse does not need a fancy auction-the same curse may be visited on an investor in a hurry to buy a stock on which someone has provided a hot tip. To avoid the curse, trading sometimes takes place on computer screens in a manner that closely resembles the spectrum auction. The players-usually large financial institutions like pension funds or mutual funds-are anonymous, but all bids and offers are displayed on the screen together with reservation prices above which the investor will not buy and below which the seller will not sell. In January 1995, the publication Pensions and Investments reported on another application of game theory in making investments.


pages: 523 words: 143,139

Algorithms to Live By: The Computer Science of Human Decisions by Brian Christian, Tom Griffiths

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4chan, Ada Lovelace, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, algorithmic trading, anthropic principle, asset allocation, autonomous vehicles, Berlin Wall, Bill Duvall, bitcoin, Community Supported Agriculture, complexity theory, constrained optimization, cosmological principle, cryptocurrency, Danny Hillis, delayed gratification, dematerialisation, diversification, double helix, Elon Musk, fault tolerance, Fellow of the Royal Society, Firefox, first-price auction, Flash crash, Frederick Winslow Taylor, George Akerlof, global supply chain, Google Chrome, Henri Poincaré, information retrieval, Internet Archive, Jeff Bezos, John Nash: game theory, John von Neumann, knapsack problem, Lao Tzu, linear programming, martingale, Nash equilibrium, natural language processing, NP-complete, P = NP, packet switching, prediction markets, race to the bottom, RAND corporation, RFC: Request For Comment, Robert X Cringely, sealed-bid auction, second-price auction, self-driving car, Silicon Valley, Skype, sorting algorithm, spectrum auction, Steve Jobs, stochastic process, Thomas Malthus, traveling salesman, Turing machine, urban planning, Vickrey auction, Walter Mischel, Y Combinator

As Nisan puts it, “The basic thing is if you don’t want your clients to optimize against you, you’d better optimize for them. That’s the whole proof.… If I design an algorithm that already optimizes for you, there is nothing you can do.” Algorithmic game theory has made huge contributions to a number of practical applications over the past twenty years: helping us understand packet routing on the Internet, improving FCC spectrum auctions that allocate precious (if invisible) public goods, and enhancing the matching algorithms that pair medical students with hospitals, among others. And this is likely just the beginning of a much larger transformation. “We are just scratching the surface,” says Nisan. “Even in the theory we are just starting to understand it. And there is another generation probably until what I completely understand today theoretically will successfully be applied to humans.

See also auctions; investment strategies; market behavior bubbles Nash equilibrium and tragedy of commons and Economist Edmonds, Jack educational evaluation Edwards, Ward efficient algorithm efficient or tractable problem, defined Egyptian pharaohs’ reigns electrical memory organ elevator pitch email emotions Engel, Joel Eno, Brian environmental movement epidemiology equality equilibrium Erlang, Agner Krarup Erlang distribution error bars error tradeoff space ethics Evernote eviction policies evolution constraints and expected value Explicit Congestion Notification (ECN) explore/exploit tradeoff Exponential Backoff exponential time (O(2n)) Facebook factorial time (O(n!)) fads false positives FBI FCC spectrum auctions FDA feedback fencing filing Finkel, Larry Firefox fire truck problem First-In, First-Out (FIFO) fitness Fitzgerald, F. Scott Flack, Jessica flash memory flat hierarchies Flood, Merrill flow control food fads minimizing rotten overfitting and Forbes forgetting curve forgiveness Forster, E. M. Fortune 500 list Frank, Robert Franklin, Benjamin Fredrickson, Barbara Fried, Jason full-information games optimal stopping and fundamental investors future, discounted Galileo gambling game theory gaming Gantt, Henry Gantt charts Gardner, Martin Gaskell, R.


pages: 666 words: 181,495

In the Plex: How Google Thinks, Works, and Shapes Our Lives by Steven Levy

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23andMe, AltaVista, Anne Wojcicki, Apple's 1984 Super Bowl advert, autonomous vehicles, book scanning, Brewster Kahle, Burning Man, business process, clean water, cloud computing, crowdsourcing, Dean Kamen, discounted cash flows, don't be evil, Douglas Engelbart, El Camino Real, fault tolerance, Firefox, Gerard Salton, Google bus, Google Chrome, Google Earth, Googley, HyperCard, hypertext link, IBM and the Holocaust, informal economy, information retrieval, Internet Archive, Jeff Bezos, Kevin Kelly, Mark Zuckerberg, Menlo Park, optical character recognition, PageRank, Paul Buchheit, Potemkin village, prediction markets, recommendation engine, risk tolerance, Sand Hill Road, Saturday Night Live, search inside the book, second-price auction, Silicon Valley, skunkworks, Skype, slashdot, social graph, social software, social web, spectrum auction, speech recognition, statistical model, Steve Ballmer, Steve Jobs, Steven Levy, Ted Nelson, telemarketer, trade route, traveling salesman, Vannevar Bush, web application, WikiLeaks, Y Combinator

The competition for second position will automatically raise the price for the first position. So the simplification thickens the market. The effect is that it guarantees that there’s competition for the top positions.” Veach and Kamangar’s implementation was so impressive that it changed even Milgrom’s way of thinking. “Once I saw this from Google, I began seeing it everywhere,” he says, citing examples in spectrum auctions, diamond markets, and the competition between Kenyan and Rwandan coffee beans. “I’ve begun to realize that Google somehow or other introduced a level of simplification to ad auctions that was not included before.” And it wasn’t just a theoretical advance. “Google immediately started getting higher prices for advertising than Overture was getting,” he notes. That wasn’t only because of the auction model; Veach and Kamangar had made other significant advances.

He had learned that nothing swayed a Googler more than what looked like specific data, even if it had been somewhat concocted from the gut. “There’s an 87 percent chance that Verizon will top this.” (Later he explained his reasoning: “There was no way in hell that Verizon was going to let us walk away with spectrum that would destroy its business model.”) The board okayed the bid, and on Thursday, January 24, 2008, Google’s $4.71 billion bid made the spectrum auction official. At that moment Google owned the valuable C block licenses. It still owned them the next day and through the weekend, as no other bidder emerged. “The realization was growing that ‘My God, maybe we were all wrong,’” says Whitt, who was starting to regret his brash 87 percent prediction. The probable fallback within Google would be to lease out the spectrum to partners, but that would have been an unholy mess and a massive distraction from its business.


pages: 322 words: 84,752

Pax Technica: How the Internet of Things May Set Us Free or Lock Us Up by Philip N. Howard

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Affordable Care Act / Obamacare, Berlin Wall, bitcoin, blood diamonds, Bretton Woods, Brian Krebs, British Empire, call centre, Chelsea Manning, citizen journalism, clean water, cloud computing, corporate social responsibility, crowdsourcing, Edward Snowden, en.wikipedia.org, failed state, Fall of the Berlin Wall, feminist movement, Filter Bubble, Firefox, Francis Fukuyama: the end of history, Google Earth, Howard Rheingold, income inequality, informal economy, Internet of things, Julian Assange, Kibera, Kickstarter, land reform, M-Pesa, Marshall McLuhan, megacity, Mikhail Gorbachev, mobile money, Mohammed Bouazizi, national security letter, Network effects, obamacare, Occupy movement, packet switching, pension reform, prediction markets, sentiment analysis, Silicon Valley, Skype, spectrum auction, statistical model, Stuxnet, trade route, uranium enrichment, WikiLeaks, zero day

India lost between $8 billion and $20 billion from a badly managed licensing process that benefited corrupt officials and shell companies but left mobile-phone users with worse service, not better. Governments should have open and transparent ways of allocating the public spectrum that encourage ownership diversity. Auctions are straightforward, and special credits for women-owned, minority-owned, and locally owned businesses can increase the diversity of ownership within many sectors that make use of public resources like the broadcast spectrum. When access to the spectrum is publicly auctioned in coordination with programs to improve ownership diversity, the outcome is a transparent process with diverse stakeholders.34 If we buy the argument that a “device tithe” could also go a long way to promoting public access to the internet of things, then perhaps 10 percent of the profits of such auctions should be set aside as a technology fund for public-interest groups.

See also Roman Empire pax technica, xix–xx, xxiv–xxv, 297; Chinese internet rivaling, 191; combating the empire of, 184; consequences of, 146; cyberespionage and, 40; defining, 145–47; democracies in, xxii; as empire, 228; evolution of, 34; promise of, 255–57; stability and, xix–xxii, 147, 214, 223, 230; states in, sharing security knowledge, 41–42; threat to, 162; thriving in, 254–55 Pentland, Sandy, 179, 241 People’s Daily (China), 186 People’s Liberation Army Unit 61398, 38–39 periphery, 147 personal identity, 248 Peru, autonomous zones in, 81 Pew Internet and American Life Project, 45 Pfaff, Steve, 110 Philippines: autonomous region in, 81; cybercrime laws in, 165; digital dilemma in, 87; protests in, 127; vigilante groups in, 103–4, 160; working with Anonymous, 43 phone companies, privatization of, 56–57, 74 Piggipedia, 164 piracy, combating, 98 Pirate Bay, 13, 166 Pirate Parties, xx, 166 pirates, 72, 81, 93–94 police, technologies leaking to, 222 political bots, 31, 204–11, 233, 234 political communication, 13 political data, xxi political groups, digital infrastructure and, 135 political information, consumption of, 45 political internet, xiii, 36 political order, 53, 108–10: and relationships between devices, 34; rethinking, 224–25 political power, 16, 233 politics: criminal organizations disrupting, 80; digital engagement with, 9–10; face-to-face contact and, 44; global, 44, 62, 149 Polity IV Project, 92 poor people, global distribution of, 97 Popović, Srđa, 238 Popular Party (Spain), 128 Premise, 142 PRI party (Mexico), 51 privacy groups, 163 privacy violations, 179–80 process tracing, 110 propaganda: bots used for, 205; computational, 29–30; digital media weakening, 124; geotagged, 114–15 prostitution, digital media and, 103 public alert systems, 18–19 public good, 250–51 public opinion, manipulation of, 43 public spectrum, public auctions for, 250 push polling, 209–10, 211 Pussy Riot, 86, 171 Putin, Vladimir, 171, 197, 201 Qtiesh, Anas, 204 Radonski, Henrique, 93 Rassd News Network, 20 reality-based research, 179 Recollections (Tocqueville), 108 Reporters Without Borders, 163 revolutions: histories of, 61; nature of, 108–9 Rheingold, Howard, 85 robocalls, 207 Roh Moo-hyun, 127–28 Rolls-Royce, 212 Roman Empire, 1, 67, 107–8, 146, 231.


pages: 349 words: 114,038

Culture & Empire: Digital Revolution by Pieter Hintjens

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4chan, airport security, anti-communist, anti-pattern, barriers to entry, Bill Duvall, bitcoin, blockchain, business climate, business intelligence, business process, Chelsea Manning, clean water, congestion charging, Corn Laws, correlation does not imply causation, cryptocurrency, Debian, Edward Snowden, failed state, financial independence, Firefox, full text search, German hyperinflation, global village, GnuPG, Google Chrome, greed is good, Hernando de Soto, hiring and firing, informal economy, invisible hand, James Watt: steam engine, Jeff Rulifson, Julian Assange, Kickstarter, M-Pesa, mutually assured destruction, Naomi Klein, national security letter, new economy, New Urbanism, Occupy movement, offshore financial centre, packet switching, patent troll, peak oil, pre–internet, private military company, race to the bottom, rent-seeking, reserve currency, RFC: Request For Comment, Richard Feynman, Richard Feynman, Richard Stallman, Satoshi Nakamoto, security theater, Skype, slashdot, software patent, spectrum auction, Steve Crocker, Steve Jobs, Steven Pinker, Stuxnet, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, trade route, transaction costs, union organizing, web application, WikiLeaks, Y2K, zero day, Zipf's Law

This was an enormous amount of money if you based your predictions off the number of fixed lines at the time: perhaps a few hundred thousand in all of Nigeria. Before long, multicolored teams of South African engineers were filling Lagos' luxury hotels and planning how to cover the country with mobile phone base stations. I remember the buzz that the teams of young engineers brought to the city in 2001. Things were changing, finally. More or less the same happened across the entire African continent as every country organized its own lucrative spectrum auctions. To build out the mobile phone networks, operators dug cables across every country, criss-crossing it with new, high-capacity fiber. In effect, the First Wave built the wiring that would allow the Second Wave. All it required was some upgrades of the cell towers -- Chinese equipment is really so cheap -- and new handsets. The first handsets were very costly. They were the toys of the rich, which seemed to fit the old pattern where the rich got all the nice stuff and used it to improve their lives, while ordinary people became steadily poorer.


pages: 459 words: 103,153

Adapt: Why Success Always Starts With Failure by Tim Harford

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Andrew Wiles, banking crisis, Basel III, Berlin Wall, Bernie Madoff, Black Swan, car-free, carbon footprint, Cass Sunstein, charter city, Clayton Christensen, clean water, cloud computing, cognitive dissonance, complexity theory, corporate governance, correlation does not imply causation, credit crunch, Credit Default Swap, crowdsourcing, cuban missile crisis, Daniel Kahneman / Amos Tversky, Dava Sobel, Deep Water Horizon, Deng Xiaoping, double entry bookkeeping, Edmond Halley, en.wikipedia.org, Erik Brynjolfsson, experimental subject, Fall of the Berlin Wall, Fermat's Last Theorem, Firefox, food miles, Gerolamo Cardano, global supply chain, Isaac Newton, Jane Jacobs, Jarndyce and Jarndyce, Jarndyce and Jarndyce, John Harrison: Longitude, knowledge worker, loose coupling, Martin Wolf, Menlo Park, Mikhail Gorbachev, mutually assured destruction, Netflix Prize, New Urbanism, Nick Leeson, PageRank, Piper Alpha, profit motive, Richard Florida, Richard Thaler, rolodex, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, South China Sea, special economic zone, spectrum auction, Steve Jobs, supply-chain management, the market place, The Wisdom of Crowds, too big to fail, trade route, Tyler Cowen: Great Stagnation, web application, X Prize

A figure of $50 per tonne of carbon is not wildly out of line with informed estimates of a sensible carbon price, although the range of estimates is large. * A bond is a kind of tradable loan: if you buy the bond, you’re getting the right to receive the loan repayments, perhaps from a company, perhaps from a government, or perhaps from some more complex financial process. * Readers of The Undercover Economist may recall Klemperer as one of the designers of the 3G spectrum auctions.


pages: 91 words: 26,009

Capitalism: A Ghost Story by Arundhati Roy

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Bretton Woods, corporate governance, feminist movement, Frank Gehry, ghettoisation, Howard Zinn, informal economy, land reform, Mahatma Gandhi, means of production, megacity, microcredit, neoliberal agenda, Occupy movement, RAND corporation, reserve currency, special economic zone, spectrum auction, stem cell, The Chicago School, Washington Consensus, WikiLeaks

The noisier the carnival around elections, the less sure we are that democracy really exists. Each new corruption scandal that surfaces in India makes the last one look tame. In the summer of 2011 the 2G spectrum scandal broke. We learned that corporations had siphoned away $40 billion of public money by installing a friendly soul as the minister of communications and information who grossly underpriced the licenses for 2G telecom spectrums and illegally auctioned them to his buddies. The taped telephone conversations leaked to the press showed how a network of industrialists and their front companies, ministers, senior journalists, and a TV anchor were involved in facilitating this daylight robbery. The tapes were just an MRI that confirmed a diagnosis that people had made long ago. The privatization and illegal sale of telecom spectrum does not involve war, displacement, and ecological devastation.

The Future of Technology by Tom Standage

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air freight, barriers to entry, business process, business process outsourcing, call centre, Clayton Christensen, computer vision, connected car, corporate governance, disintermediation, distributed generation, double helix, experimental economics, full employment, hydrogen economy, industrial robot, informal economy, interchangeable parts, job satisfaction, labour market flexibility, market design, Menlo Park, millennium bug, moral hazard, natural language processing, Network effects, new economy, Nicholas Carr, optical character recognition, railway mania, rent-seeking, RFID, Silicon Valley, Silicon Valley ideology, Silicon Valley startup, six sigma, Skype, smart grid, software as a service, spectrum auction, speech recognition, stem cell, Steve Ballmer, technology bubble, telemarketer, transcontinental railway, Y2K

So the 3g adventure got off to a bad start in Europe by nearly bankrupting the industry. Since 2000 most operators have written down the value of their 3g licences. Some even handed the licences back to the governments from which they bought them, rather than commit themselves to building expensive new 3g networks within strict time limits. (Reselling the licences was forbidden.) The whole episode is now something the industry would rather forget. “The spectrum auction is a nightmare the operators don’t want to remember,” says Mr Cole. “I haven’t heard it mentioned in a long time.” Ready, steady, flop! The pioneering launch of 3g services at the end of 2001 in Japan and South Korea, the world’s two most advanced mobile markets, did little to lighten the mood. In both countries, operators were using 3g technologies different from the w-cdma standard (which is also known as umts) being adopted in Europe.


pages: 406 words: 88,820

Television disrupted: the transition from network to networked TV by Shelly Palmer

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barriers to entry, call centre, disintermediation, en.wikipedia.org, hypertext link, interchangeable parts, invention of movable type, James Watt: steam engine, linear programming, market design, pattern recognition, recommendation engine, Saturday Night Live, shareholder value, Skype, spectrum auction, Steve Jobs, subscription business, Telecommunications Act of 1996, Vickrey auction, yield management

All rights reserved. 12-Television.Chap Twelve v3.qxd 3/20/06 7:28 AM Page 184 184 C H A P T E R 1 2 Television Disrupted There is a concerted effort being put forth by consumers, municipalities and commercial enterprises to create a nationwide two-way wireless network capable of transporting data using TCP/IP (Transfer Control Protocol/Internet Protocol), the language of the Internet. The goal of these organizations is to create an environment where all of your wireless devices are connected all of the time. They will use spectrum licensed from the FCC, possibly some of the old analog television spectrum being auctioned off during the analog to digital television transition. As this battle unfolds, you are going to see fierce legal fights between all of the companies that have existing infrastructure and all of the companies and municipalities that want to obviate or disintermediate these old distribution platforms in favor of the new, cheaper, more efficient, inherently two-way wireless systems. The consumer benefits of the new wireless world will be explosive.


pages: 463 words: 118,936

Darwin Among the Machines by George Dyson

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Ada Lovelace, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, Albert Einstein, anti-communist, British Empire, carbon-based life, cellular automata, Claude Shannon: information theory, combinatorial explosion, computer age, Danny Hillis, fault tolerance, Fellow of the Royal Society, finite state, IFF: identification friend or foe, invention of the telescope, invisible hand, Isaac Newton, Jacquard loom, Jacquard loom, James Watt: steam engine, John Nash: game theory, John von Neumann, Menlo Park, Nash equilibrium, Norbert Wiener, On the Economy of Machinery and Manufactures, packet switching, pattern recognition, phenotype, RAND corporation, Richard Feynman, Richard Feynman, spectrum auction, strong AI, the scientific method, The Wealth of Nations by Adam Smith, Turing machine, Von Neumann architecture

You can plug only so many things at one time into your wall. As everything from taxicabs to telephones to televisions to personal digital assistants becomes connected to the network, universal—and microminiature—wireless is the only way to disentangle the communications web. “But there’s not enough wireless bandwidth to go around,” say the skeptics, citing the billions of dollars raised whenever a few slivers of radio spectrum are auctioned off. Baran disagrees. “Tune a spectrum analyzer across a band of UHF frequencies and you encounter a few strong signals. Most of the band at any instant is primarily silence, or a background of weaker signals . . . much of the radio band is empty much of the time! The frequency shortage is caused by thinking solely in terms of dumb transmitters and dumb receivers. With today’s smart electronics, even occupied frequencies could potentially be used.”29 Baran made a similar argument in 1960, advising the government to build an all-digital, packet-switched data network instead of throwing good money after bad trying to blast-harden the centralized, circuit-switched network developed for analog transmission of voice.


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Dogfight: How Apple and Google Went to War and Started a Revolution by Fred Vogelstein

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Apple II, cloud computing, disintermediation, don't be evil, Dynabook, Firefox, Google Chrome, Google Glasses, Googley, Jony Ive, Mark Zuckerberg, Peter Thiel, pre–internet, Silicon Valley, Silicon Valley startup, Skype, software patent, spectrum auction, Steve Ballmer, Steve Jobs, Steve Wozniak, Steven Levy, Tim Cook: Apple, web application

“When I joined the Apple board [in 2006], Steve and I spoke about this [Android], and I said this thing is coming, and we agreed that we would monitor the situation.” Certainly, Google’s other initiatives support Schmidt’s recollection. Android’s success was dependent on its getting the big U.S. carriers to cooperate, but at the end of 2007 Google was, if anything, going out of its way to make them angry. A giant slice of wireless spectrum was up for auction by the government, and Google, with a $4.71 billion bid of its own, tried to drive the price up for wireless carriers. Google didn’t want the spectrum. It just wanted to make sure the government required the winner to play by new, Google-friendly rules. The sanctimoniousness of using money, not to buy spectrum, but to acquire a pulpit from which to lecture carriers on table manners, infuriated them, especially Verizon, the eventual auction winner.


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The Zero Marginal Cost Society: The Internet of Things, the Collaborative Commons, and the Eclipse of Capitalism by Jeremy Rifkin

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3D printing, additive manufacturing, Airbnb, autonomous vehicles, back-to-the-land, big-box store, bioinformatics, bitcoin, business process, Chris Urmson, clean water, cleantech, cloud computing, collaborative consumption, collaborative economy, Community Supported Agriculture, computer vision, crowdsourcing, demographic transition, distributed generation, en.wikipedia.org, Frederick Winslow Taylor, global supply chain, global village, Hacker Ethic, industrial robot, informal economy, intermodal, Internet of things, invisible hand, Isaac Newton, James Watt: steam engine, job automation, John Maynard Keynes: Economic Possibilities for our Grandchildren, John Maynard Keynes: technological unemployment, Julian Assange, Kickstarter, knowledge worker, labour mobility, Mahatma Gandhi, manufacturing employment, Mark Zuckerberg, market design, means of production, meta analysis, meta-analysis, natural language processing, new economy, New Urbanism, nuclear winter, Occupy movement, oil shale / tar sands, pattern recognition, peer-to-peer lending, personalized medicine, phenotype, planetary scale, price discrimination, profit motive, RAND corporation, randomized controlled trial, Ray Kurzweil, RFID, Richard Stallman, risk/return, Ronald Coase, search inside the book, self-driving car, shareholder value, sharing economy, Silicon Valley, Skype, smart cities, smart grid, smart meter, social web, software as a service, spectrum auction, Steve Jobs, Stewart Brand, the built environment, The Nature of the Firm, The Structural Transformation of the Public Sphere, The Wealth of Nations by Adam Smith, The Wisdom of Crowds, Thomas Kuhn: the structure of scientific revolutions, Thomas L Friedman, too big to fail, transaction costs, urban planning, Watson beat the top human players on Jeopardy!, web application, Whole Earth Catalog, Whole Earth Review, WikiLeaks, working poor, Zipcar

Or, in today’s parlance, “the government should not be in the business of picking winners and losers,” not only because it lacks the vital up-to-the-moment information on value propositions that sellers and buyers bring to the market, but also because government policy makers are subject to influence peddling by special interests. Most economists bought into Coase’s thesis, and eventually the FCC itself began to fall in line with Coase’s argument by allocating spectrum leases through public auctions to the highest bidder.51 The FCC’s decision to auction leases wasn’t entirely devoid of self-interest. The government reasoned that from a purely financial perspective, it made far more sense to sell valuable spectrum leases, which could put billions of dollars into the federal coffers, than to just give it away for free. The idea was that by selling spectrum leases, both the government and private enterprise came out on top.


pages: 903 words: 235,753

The Stack: On Software and Sovereignty by Benjamin H. Bratton

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1960s counterculture, 3D printing, 4chan, Ada Lovelace, additive manufacturing, airport security, Alan Turing: On Computable Numbers, with an Application to the Entscheidungsproblem, algorithmic trading, Amazon Mechanical Turk, Amazon Web Services, augmented reality, autonomous vehicles, Berlin Wall, bioinformatics, bitcoin, blockchain, Buckminster Fuller, Burning Man, call centre, carbon footprint, carbon-based life, Cass Sunstein, Celebration, Florida, charter city, clean water, cloud computing, connected car, corporate governance, crowdsourcing, cryptocurrency, dark matter, David Graeber, deglobalization, dematerialisation, disintermediation, distributed generation, don't be evil, Douglas Engelbart, Edward Snowden, Elon Musk, en.wikipedia.org, Eratosthenes, ethereum blockchain, facts on the ground, Flash crash, Frank Gehry, Frederick Winslow Taylor, future of work, Georg Cantor, gig economy, global supply chain, Google Earth, Google Glasses, Guggenheim Bilbao, High speed trading, Hyperloop, illegal immigration, industrial robot, information retrieval, intermodal, Internet of things, invisible hand, Jacob Appelbaum, Jaron Lanier, Jony Ive, Julian Assange, Khan Academy, linked data, Mark Zuckerberg, market fundamentalism, Marshall McLuhan, Masdar, McMansion, means of production, megacity, megastructure, Menlo Park, Minecraft, Monroe Doctrine, Network effects, new economy, offshore financial centre, oil shale / tar sands, packet switching, PageRank, pattern recognition, peak oil, performance metric, personalized medicine, Peter Thiel, phenotype, place-making, planetary scale, RAND corporation, recommendation engine, reserve currency, RFID, Sand Hill Road, self-driving car, semantic web, sharing economy, Silicon Valley, Silicon Valley ideology, Slavoj Žižek, smart cities, smart grid, smart meter, social graph, software studies, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Startup school, statistical arbitrage, Steve Jobs, Steven Levy, Stewart Brand, Stuxnet, Superbowl ad, supply-chain management, supply-chain management software, TaskRabbit, the built environment, The Chicago School, the scientific method, Torches of Freedom, transaction costs, Turing complete, Turing machine, Turing test, universal basic income, urban planning, Vernor Vinge, Washington Consensus, web application, WikiLeaks, working poor, Y Combinator

It smooths space by striating it with heavy physical grids of cables and server farms, and striates space by smoothing it out with ubiquitous access, sensing, relay, and processing micropoints. For its chthonic Cloud, data centers are housed under mountains with reliable ice cores; suburban farmland between metropolitan trading centers is redug to lay private cable for algorithmic trading concerns near the old AT&T switches in New Jersey, realizing a new topographic expression of the transport layer of the TCP/IP stack; while the wireless frequency spectrum is subdivided, auctioned, allocated, and bundled into derivatives like any other prized commercial real estate. Whereas the Schmittian “grounded” way of thinking detests dedifferentiated space and the flattening superimposition of multiple maps, valorizing instead the perspectival spatial order of human establishment, the geographies of The Stack go a long way toward collapsing distinctions between the one and the other, as its interlacing of land, sea, and air through networks of recombinant flows realizes the simultaneous physicalization of the virtual and the virtualization of physical forces.


pages: 566 words: 163,322

The Rise and Fall of Nations: Forces of Change in the Post-Crisis World by Ruchir Sharma

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3D printing, Asian financial crisis, backtesting, bank run, banking crisis, Berlin Wall, Bernie Sanders, BRICs, business climate, business process, call centre, capital controls, Capital in the Twenty-First Century by Thomas Piketty, Carmen Reinhart, central bank independence, centre right, colonial rule, Commodity Super-Cycle, corporate governance, crony capitalism, currency peg, dark matter, debt deflation, deglobalization, deindustrialization, demographic dividend, demographic transition, Deng Xiaoping, Doha Development Round, Donald Trump, Edward Glaeser, Elon Musk, eurozone crisis, failed state, Fall of the Berlin Wall, falling living standards, Francis Fukuyama: the end of history, Freestyle chess, Gini coefficient, hiring and firing, income inequality, indoor plumbing, industrial robot, inflation targeting, Internet of things, Jeff Bezos, job automation, Joseph Schumpeter, Kenneth Rogoff, knowledge economy, labor-force participation, Malacca Straits, Mark Zuckerberg, market bubble, megacity, Mexican peso crisis / tequila crisis, mittelstand, moral hazard, New Economic Geography, North Sea oil, oil rush, oil shale / tar sands, oil shock, pattern recognition, Peter Thiel, pets.com, Plutocrats, plutocrats, Ponzi scheme, price stability, Productivity paradox, purchasing power parity, quantitative easing, Ralph Waldo Emerson, random walk, rent-seeking, reserve currency, Ronald Coase, Ronald Reagan, savings glut, secular stagnation, Shenzhen was a fishing village, Silicon Valley, Silicon Valley startup, Simon Kuznets, smart cities, Snapchat, South China Sea, sovereign wealth fund, special economic zone, spectrum auction, Steve Jobs, The Wisdom of Crowds, Thomas Malthus, total factor productivity, trade liberalization, trade route, tulip mania, Tyler Cowen: Great Stagnation, unorthodox policies, Washington Consensus, WikiLeaks, women in the workforce, working-age population


pages: 580 words: 168,476

The Price of Inequality: How Today's Divided Society Endangers Our Future by Joseph E. Stiglitz

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affirmative action, Affordable Care Act / Obamacare, airline deregulation, Andrei Shleifer, banking crisis, barriers to entry, Basel III, battle of ideas, Berlin Wall, capital controls, Carmen Reinhart, Cass Sunstein, central bank independence, collapse of Lehman Brothers, collective bargaining, colonial rule, corporate governance, Credit Default Swap, Daniel Kahneman / Amos Tversky, Dava Sobel, declining real wages, deskilling, Exxon Valdez, Fall of the Berlin Wall, financial deregulation, financial innovation, Flash crash, framing effect, full employment, George Akerlof, Gini coefficient, income inequality, income per capita, indoor plumbing, inflation targeting, invisible hand, John Harrison: Longitude, John Maynard Keynes: Economic Possibilities for our Grandchildren, Kenneth Rogoff, labour market flexibility, London Interbank Offered Rate, lone genius, low skilled workers, Mark Zuckerberg, market bubble, market fundamentalism, medical bankruptcy, microcredit, moral hazard, mortgage tax deduction, obamacare, offshore financial centre, paper trading, patent troll, payday loans, price stability, profit maximization, profit motive, purchasing power parity, race to the bottom, rent-seeking, reserve currency, Richard Thaler, Robert Shiller, Robert Shiller, Ronald Coase, Ronald Reagan, shareholder value, short selling, Silicon Valley, Simon Kuznets, spectrum auction, Steve Jobs, technology bubble, The Chicago School, The Fortune at the Bottom of the Pyramid, The Myth of the Rational Market, The Spirit Level, The Wealth of Nations by Adam Smith, too big to fail, trade liberalization, transaction costs, trickle-down economics, ultimatum game, uranium enrichment, very high income, We are the 99%, women in the workforce


pages: 889 words: 433,897

The Best of 2600: A Hacker Odyssey by Emmanuel Goldstein

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affirmative action, Apple II, call centre, don't be evil, Firefox, game design, Hacker Ethic, hiring and firing, information retrieval, late fees, license plate recognition, optical character recognition, packet switching, pirate software, place-making, profit motive, QWERTY keyboard, RFID, Robert Hanssen: Double agent, rolodex, Ronald Reagan, Silicon Valley, Skype, spectrum auction, statistical model, Steve Jobs, Steve Wozniak, Steven Levy, Telecommunications Act of 1996, telemarketer, Y2K

Anyway, we’ll get into the security features of GSM later in this article, so remain calm. GSM comes to America In the ’90s, the industry began buzzing about Personal Communications Services, or PCS. PCS boasted, among other things, small communications gadgets crammed with neato-keen features to do all sorts of things. Or that’s what they hoped. The FCC allocated the 1900 MHz band of the EM spectrum for PCS, and auctioned off frequencies. (I often wondered if I could purchase that part of the EM spectrum known as “blue,” or maybe “green;” think of the royalties.) Anyway, certain members of the telecommunications industry recognized GSM as a great technology with which to build upon 94192c12.qxd 6/3/08 3:33 PM Page 429 The Changing of the Telephone the PCS idea. The first GSM-based PCS networks were designed, implemented, and tested in the mid-’90s, and by 1995 the first taste of GSM was available to the American public.