Digital Economics

Abstract

Digital technology is the representation of information in bits. This technology has reduced the cost of storage, computation, and transmission of data. Research on digital economics examines whether and how digital technology changes economic activity. In this review, we emphasize the reduction in five distinct economic costs associated with digital economic activity: search costs, replication costs, transportation costs, tracking costs, and verification costs. (JEL D24, D83, L86, O33, R41)

Digital Platforms and the Demand for International Tourism Services

“…Digital platforms would be expected to increase the demand for tourism services through their impact on the pecuniary and non-pecuniary cost of travel: the price of airfare and accommodations, expanding the choice of alternative destinations, the time spent making travel plans, or even reducing uncertainty about the quality of a future trip, among others. Goldfarb and Tucker (2019) analyze how digital technologies affect economic activity in the broad, not only in the tourism sector, distinguishing between five different types of costs that such technologies help reduce: (i) search costs; (ii) replication costs; (iii) transportation costs; (iv) tracking costs; and (v) verification costs. In this typology, replication and transportation costs do not have an impact -or, at least, not a direct impact-on the demand for tourism services, as they comprise the exchange of digital goods and information.…”

New vistas for marketing strategy: digital, data-rich, and developing market (D3) environments

“…The growth of digital marketing strategy is inextricably linked to the growth of digital technology, as well as to organizations' needs to incorporate this technological advance in their strategic planning. As Goldfarb and Tucker (2019) argue, digital technology, or the representation of information in bits, has fundamentally lowered fives kinds of costs in the marketplace (see Fig. 1…”

Electoral Competition with Strategic Disclosure

“…Gratton et al [16] also consider the question of strategic information revelation by candidates for office. In their model, candidates are vertically differentiated and choose when, if ever, to reveal their 5 On March 17, 2018, The Guardian and The New York Times described the process by which Cambridge Analytica collected detailed data on individual voters through use of a Facebook app: "How Trump Consultants Exploited the Facebook Data of Millions" and "Revealed: 50 million Facebook profiles harvested for Cambridge Analytica in major data breach". type to voters.…”

“…For an example of "traditional" ways to reach specific parts of the electorate, see the analysis of TV campaign ads during the 2000, 2004 and 2008 US presidential races in Ridout et al [2]. Goldfarb and Tucker [5], Section 6.1, review the recent literature on personalized advertising. The article from The Economic Times mentioned in footnote 3, as well as the issue of the MIT Technology Review mentioned above summarize the state of the art (as of 2018) for advertising techniques used in electoral campaigns.…”