Economic Analysis of the Digital Economy

As the cost of storing, sharing, and analyzing data has decreased, economic activity has become increasingly digital. But while the effects of digital technology and improved digital communication have been explored in a variety of contexts, the impact on economic activity-from consumer and entrepreneurial behavior to the ways in which governments determine policy-is less well understood.

Economics of Digitization explores the economic impact of digitization, with each chapter identifying a promising new area of research. The Internet is one of the key drivers of growth in digital communication, and the first set of chapters discusses basic supply-and-demand factors related to access. Later chapters discuss new opportunities and challenges created by digital technology and describe some of the most pressing policy issues. As digital technologies continue to gain in momentum and importance, it has become clear that digitization has features that do not fit well into traditional economic models. This suggests a need for a better understanding of the impact of digital technology on economic activity, and Economics of Digitization brings together leading scholars to explore this emerging area of research.

Avi Goldfarb is professor of marketing at Rotman School of Management at the University of Toronto.

Shane M. Greenstein is the Kellogg Chair in Information Technology and professor of management and strategy at the Kellogg School of Management at Northwestern University.

Catherine E. Tucker is the Mark Hyman Jr. Career Development Professor and associate professor of management science at the MIT Sloan School of Management. All three editors are research associates of the NBER.