nep-ict New Economics Papers
on Information and Communication Technologies
Issue of 2005‒11‒05
six papers chosen by
Walter Frisch
University Vienna

  1. U.S. v. Microsoft: Did Consumers Win? By David S. Evans; Albert L. Nichols; Richard Schmalensee
  2. Power-Biased Technological Change and the Rise in Earnings Inequality By Peter Skott; Frederick Guy
  3. Identity theft: do definitions still matter? By Julia S. Cheney
  4. The Information Technology Revolution and the Puzzling Trends in Tobin’s average q By Adrian Peralta-Alva
  5. ICT and Economic Growth: A Quantification of Productivity Growth in Spain 1985-2002 By Matilde Mas; Javier Quesada

  1. By: David S. Evans; Albert L. Nichols; Richard Schmalensee
    Abstract: U.S. v. Microsoft and the related state suit filed in 1998 appear finally to have concluded. In a unanimous en banc decision issued in late June 2004, the D.C. Circuit Court of Appeals rejected challenges to the remedies approved by the District Court in November 2002. The wave of follow-on private antitrust suits filed against Microsoft also appears to be subsiding. In this paper we review the remedies imposed in the United States, in terms of both their relationship to the violations found and their impact on consumer welfare. We conclude that the remedies addressed the violations ultimately found by the Court of Appeals (which were a subset of those found by the original district court and an even smaller subset of the violations alleged, both in court and in public discourse) and went beyond them in important ways. Thus, for those who believe that the courts were right in finding that some of Microsoft's actions harmed competition, the constraints placed on its behavior and the active, ongoing oversight by the Court and the plaintiffs provide useful protection against a recurrence of such harm. For those who believe that Microsoft should not have been found liable because of insufficient evidence of harm to consumers, the remedies may be unnecessary, but they avoided the serious potential damage to consumer welfare that was likely to accompany the main alternative proposals. The remedies actually imposed appear to have struck a reasonable balance between protecting consumers against the types of actions found illegal and harming consumers by unnecessarily restricting Microsoft's ability to compete.
    JEL: K21 L1 L4 L6
    Date: 2005–10
  2. By: Peter Skott (University of Massachusetts Amherst); Frederick Guy (Birkbeck College)
    Abstract: New information and communication technologies, we argue, have been 'power-biased': they have allowed firms to monitor low-skill workers more closely, thus reducing the power of these workers. An efficiency wage model shows that 'power-biased technical change' in this sense may generate rising wage inequality accompanied by an increase in both the effort and unemployment of low-skill workers. The skill-biased technological change hypothesis, on the other hand, offers no explanation for the observed increase in effort. JEL Categories: J31, O33
    Keywords: power-biased technical change, skill bias, efficiency wages, wage inequality, work intensity
    Date: 2005–10
  3. By: Julia S. Cheney
    Abstract: Despite a statutory definition of identity theft, there is a continuing debate on whether differences among the financial frauds associated with identity theft warrant further distinction and treatment, not only by lenders and financial institutions but also by consumers and regulatory and law enforcement agencies. In this Discussion Paper, Julia S. Cheney examines four types of financial fraud – fictitious identity fraud, payment card fraud, account takeover fraud, and true name fraud – that fall under the legal term identity theft to better understand how criminal behavior patterns, risks for consumers and lenders, and mitigation strategies vary depending upon the sort of data stolen, the type of account compromised, and the opportunity for financial gain. Three areas key to developing effective solutions that, in the view of the author, would benefit from further definitional delineations are identified: measuring the success (or failure) of efforts to fight this crime, educating consumers about the risks and responses to this crime, and coordinating mitigation strategies across stakeholders and geographies.
    Keywords: Identity theft ; Fraud ; Credit cards
    Date: 2005
  4. By: Adrian Peralta-Alva (University of Miami)
    Abstract: A growing literature argues that the Information Technology rev- olution caused the stock market crash of 1973-1974, its subsequent stagnation and eventual recovery. This paper employs general equi- librium theory to test whether this good news hypothesis is consistent with the behavior of US equity prices and with the trends in corpo- rate output, investment and consumption. I …nd it is not. A model based exclusively on good news can make equity prices fall as much as in the data but it must also imply a strong economic expansion right when the US economy stagnated. However, when the observed productivity slowdown in old production methods is incorporated into the model consistency with major macroeconomic aggregates can be achieved and a 20% drop in equity values can be accounted for. (JEL E44, O33, O41)
    Keywords: Information Technology Revolution, Stock Market, Productivity Slowdown, Tobin's q, 1974, Crash
    JEL: E44 O33 O41
    Date: 2005–11–03
  5. By: Matilde Mas; Javier Quesada
    Abstract: Using new sectoral data on investment and capital services we carry out a growth accounting exercise on Spain 1985-2002. We compute the contribution to output and labour productivity growth of employment, non-ICT and ICT capital, labour qualification and Total Factor Productivity. Results are given for 29 different branches; individually and grouped into four clusters according to their ICT use intensity. Three ICT assets (hardware, communications and software) are considered. We find that although the ICT intensive group appears to be the most dynamic cluster, most of the impact on productivity is still to come. There is some evidence of a reversal of the productivity slow down of the nineties starting in the year 2000. En utilisant de nouvelles données sectorielles sur les investissements et services de capital, nous menons à bien un exercice de comptabilité de croissance de l’Espagne entre 1985 et 2002. On calcule la contribution à la croissance et la productivité du travail, de l’emploi du capital TIC et non TIC, de la qualification de main d’oeuvre et de la productivité globale des facteurs. Les résultats sont donnés pour 29 différentes branches, individuellement et réparties en quatre groupes, selon l’intensité d’utilisation de leur TIC. Trois actifs des TIC sont considérés (le matériel, les communications et les logiciels). Nous trouvons que bien que le groupe le plus intensif en TIC apparaisse comme le plus dynamique, un impact encore plus important sur la productivité est attendu. En 2000, on constate une certaine accélération de la croissance de la productivité après le ralentissement des années 90.
    Date: 2005–08–17
  6. By: Ono, Hiroshi (European Institute of Japanese Studies)
    Abstract: I examine the extent and causes of digital inequality in the three countries of East Asia – Japan, South Korea and Singapore. I take advantage of individual-level microdata collected in the three countries between 1997 and 2000, and highlight differences in the socio-economic and demographic patterns of technology adoption, usage, and skills across countries and over time. Despite the high overall diffusion rates of information communication technologies (ICT) in all three countries, there remains a clear divide in access and use between various demographic groups. I find that household income, education and gender are the key determinants of digital inequality in all three countries, but there is sizeable variation in their magnitudes. In general, I find that inequality in ICT access, use and skills reflects pre-existing inequality in other areas of economy and society in the three countries.
    Keywords: Internet; computers; digital inequality
    JEL: J16 L86 N35 O33
    Date: 2005–10–27

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