Economics of Digitization
Economical View
The economics of digitization is the field of economics that studies how digitization
affects markets and how digital data can be used to study economics.
Digitization is the process by which technology lowers the costs of
storing, sharing, and analyzing data. This process has changed how
consumers behave, how industrial activity is organized, and how
governments operate. The economics of digitization exists as a distinct
field of economics for two reasons. First, new economic models are
needed because many traditional assumptions about information no longer
holder in a digitized world. Second, the new types of data generated by
digitization require new methods to analyze.
Research in the economics of digitization touches on several fields
of economics including industrial organization, labor economics, and
intellectual property. Consequently, many of the contributions to the
economics of digitization have also found an intellectual home in these
fields. An underlying theme in much of the work in the field is that
existing government regulation of copyright, security, and antitrust is inappropriate in the modern world. For example, information goods, such as news articles and movies, now have zero marginal costs of production and sharing. This has made the redistribution without permission
common and has increased competition between providers of information
goods. Research in the economics of digitization studies how policy
should adapt in response to these changes.
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