Showing 9 of 346 Publications in Innovation & the New Economy

What Does ‘Flattening the Curve’ Mean?

TOTM Policy makers are using the term to describe the effects of social distancing and travel restrictions.  In this post, we use a cellular automata model of infection . . .

Policy makers are using the term to describe the effects of social distancing and travel restrictions.  In this post, we use a cellular automata model of infection to show how they might do this.

Read the full piece here.

Continue reading
Innovation & the New Economy

ICLE Comments Regarding European Commission Guidelines on Certain State Aid Measures in the Context of the System for Greenhouse Gas Emission Allowance Trading Post 2021

Regulatory Comments Emission trading programs have the potential dramatically to reduce the costs of abating pollution. When such programs are well designed, they can reduce abatement costs . . .

Emission trading programs have the potential dramatically to reduce the costs of abating pollution. When such programs are well designed, they can reduce abatement costs by as much as 50%.

Most emission trading programs address local ambient air pollution. As such, problems associated with the harmful redistribution of pollution from one place to another are relatively easy to address through the application of simple rules, such as an absolute cap on emissions in a certain location. Some greenhouse gases (GHGs), such as carbon dioxide (CO2), are not local pollutants and so do not justify such local restrictions. However, there is at present no global system in place that would cap GHG emissions. As a result, jurisdictions that impose local caps on GHG emissions may experience a shift in economic activity, as large emitters of GHGs choose to relocate their activities to jurisdictions with less onerous restrictions on GHG emissions. This is called “carbon leakage”. While carbon leakage may potentially lead to increased CO2 emissions, excessive measures to prevent its occurrence may be worse than the disease they are intended to cure

State aid rules are designed to promote competition within the EU. Historically, the EU has granted exemptions to state aid rules for certain measures that are intended to mitigate the potential for carbon leakage. Unfortunately, previous exemptions have contributed to a weakening of the functioning of the EU Emission Trading System (ETS) and likely contributed to its near-collapse on at least two occasions.

The current exemptions terminate at the end of December 2020. This comment evaluates the proposal to establish new exemptions to state aid rules after the current exemptions terminate. We find that, in their current form, the proposed new guidelines would permit Member States to grant state aid (in the form of free ETS allowances) that would ultimately be deleterious to its stated goals of reducing European CO2 emissions. Furthermore, the draft guidelines leave too much room for protectionist subsidies and the distortion of competition between electricity producers.

 

Continue reading
Innovation & the New Economy

R&D and the American Corporation Before World War II

Scholarship Abstract This paper is an excerpt from a larger book project called The Corporation and the Twentieth Century, which chronicles and interprets the institutional and . . .

Abstract

This paper is an excerpt from a larger book project called The Corporation and the Twentieth Century, which chronicles and interprets the institutional and economic history – the life and times, if you will – of American business in the twentieth century. One integrating theme of the book is that the signal calamities of the Great Depression and World War II, as well as the policy responses to those calamities, are crucial in understanding the structure of American industry in the post-war world. This excerpt examines the role of research and development in the corporation before and during the Depression. It argues that, although corporate R&D labs did generate many important new technologies, innovations also flowed importantly from a large variety of other sources, both within the corporation (but outside of the research lab) and elsewhere in the economy. Even though corporate research did sometimes lead to new products for the corporation to exploit, a narrative in which internal R&D systematized innovation widely in the service of corporate diversification is on the whole a fable. Nonetheless, by destroying market-supporting institutions (including, importantly, sources of external finance) and by reducing the information content of price signals, the Depression did help solidify the nexus between R&D and the large corporation. Coupled with New Deal price and entry regulation in many sectors, and followed by the far greater extent of non-market controls during World War II, the Depression set the stage for the emergence of the large Chandlerian corporation of the post-war period.

Continue reading
Innovation & the New Economy

Google And Facebook Didn’t Kill Newspapers: The Internet Did

Popular Media There is an infamous chart in media circles. It shows newspaper advertising revenue steadily rising until about the year 2000. A few years later, it . . .

There is an infamous chart in media circles. It shows newspaper advertising revenue steadily rising until about the year 2000. A few years later, it drops off a cliff. Superimposed on this chart is the exponential growth of Google and Facebook…

Read the full piece here.

Continue reading
Innovation & the New Economy

Submission on the final report of the Australian Competition and Consumer Commission’s Digital Platforms Inquiry

Regulatory Comments In a submission to the Australian Treasury on 12 September 2019, a group of esteemed international scholars critiqued the recently published Final Report of the Australian Competition and Consumer Commission (ACCC) Digital Platforms Inquiry.

In a submission to the Australian Treasury on 12 September 2019, a group of esteemed international scholars critiqued the recently published Final Report of the Australian Competition and Consumer Commission (ACCC) Digital Platforms Inquiry. 

In its report, the ACCC claims that competition in the media, communications, advertising and other markets it investigated is “not working,”  and that substantial regulatory and legislative changes are necessary to solve—and would solve—the  problems caused by ineffective competition.  

But the premise that competition is not working is not well supported by evidence presented in the report. Meanwhile, the report’s conclusion misses the bigger picture: Government intervention is appropriate only if it produces net social benefits. Yet the ACCC almost entirely omits consideration of the adverse effects of its proposed interventions, which in many cases are likely worse than the alleged problems. As such, the report’s proposals should be treated with great caution.

The submission tackles three “significant oversights”: 

  1. The ACCC’s recommendations on “platform neutrality” and the proposed creation of a “digital platforms branch” underestimate the limits of regulators’ ability to identify market failure and the major difficulties that regulators face when attempting to design markets. For instance, the ACCC recommends that Google be forced to introduce browser and search engine choice screens. Yet it is not clear that the introduction of such screens will either accelerate the entry of competitors or improve users’ experience. 
  2. The ACCC’s attempts to prop up local media firms (through subsidies and other means) appears to be driven by nostalgia for a bygone, pre-modern era, rather than a rigorous assessment of the costs and benefits of media regulation. The ACCC is quick to assume that its recommendations would produce tangible benefits for consumers, but it overlooks the potential market distortions—and impediments to ongoing innovation—that might be generated in the process.
  3. The report’s recommended extension of Australia’s privacy legislation completely ignores the tremendous compliance costs that doing so would impose on firms and, indirectly, on consumers. The recent introduction of privacy legislation in the EU and California suggests that these compliance costs might well outstrip the benefits to users.

The submission notes in conclusion that “The ACCC’s lackadaisical assessment of regulatory costs is all-the-more troubling given that its report focuses on an extremely dynamic industry. What is only a small regulatory cost today could severely hamper competition in the future.”

 

Click here to read the full submission.

Continue reading
Antitrust & Consumer Protection

The Third Circuit’s Oberdorf v. Amazon Opinion Offers a Good Approach to Reining in the Worst Abuses of Section 230

TOTM In a remarkable ruling issued earlier this month, the Third Circuit Court of Appeals held in Oberdorf v. Amazon that, under Pennsylvania products liability law, Amazon could be found liable for a third party vendor’s sale of a defective product via Amazon Marketplace.

In a remarkable ruling issued earlier this month, the Third Circuit Court of Appeals held in Oberdorf v. Amazon that, under Pennsylvania products liability law, Amazon could be found liable for a third party vendor’s sale of a defective product via Amazon Marketplace. This ruling comes in the context of Section 230 of the Communications Decency Act, which is broadly understood as immunizing platforms against liability for harmful conduct posted to their platforms by third parties (Section 230 purists may object to myu use of “platform” as approximation for the statute’s term of “interactive computer services”; I address this concern by acknowledging it with this parenthetical). This immunity has long been a bedrock principle of Internet law; it has also long been controversial; and those controversies are very much at the fore of discussion today.

Read the full piece here.

Continue reading
Data Security & Privacy

Section 230 Principles for Lawmakers and a Note of Caution as Trump Convenes his “Social Media Summit”

TOTM This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.

This morning a diverse group of more than 75 academics, scholars, and civil society organizations — including ICLE and several of its academic affiliates — published a set of seven “Principles for Lawmakers” on liability for user-generated content online, aimed at guiding discussions around potential amendments to Section 230 of the Communications Decency Act of 1996.

Read the full piece here.

Continue reading
Data Security & Privacy

ICLE Comments, Australian Competition and Consumer Commission’s Digital Platforms Inquiry

Regulatory Comments The analysis in the Australian Competition and Consumer Commission’s Preliminary Report for the Digital Platforms Inquiry is inadequate in several ways. There is a real danger that if the policy recommendations outlined in the preliminary report were to be adopted, Australian consumers would be severely harmed.

Executive Summary

The analysis in the Australian Competition and Consumer Commission’s Preliminary Report for the Digital Platforms Inquiry is inadequate in several ways, most notably:

  • It mischaracterizes the relationship between changes in the economics of media advertising and the rise of digital platforms such as Facebook and Google.
  • Its analysis of the dynamics of media diversity is misguided.
  • Its competition analysis assumes its results and makes unsupportable claims about the division of advertising markets.
  • It is recklessly unconcerned with the freedom of speech consequences of its recommendations.
  • It fails to recognize, and proposes to supplant, the ongoing social negotiation over data privacy.
  • It provides a poor analytic base on which to make policy recommendations, as it applies a static, rather than dynamic, approach to its analysis.

There is a real danger that if the policy recommendations outlined in the preliminary report were to be adopted, Australian consumers would be severely harmed.

Click here to read the full comments.

Continue reading
Antitrust & Consumer Protection

Economies of scale in homeless camp cleanups with some fishy results

TOTM “Our City has become a cesspool,” according Portland police union president, Daryl Turner. He was describing efforts to address the city’s large and growing homelessness crisis.

“Our City has become a cesspool,” according Portland police union president, Daryl Turner. He was describing efforts to address the city’s large and growing homelessness crisis.

Read the full piece here.

Continue reading
Innovation & the New Economy