Network Effects–We Missed the Inframarginals

When discussing the internet, the economic concept that seems to have made the largest dispersion into popular discourse is the concept of ‘network effects’. “Facebook  is unconquerable because of positive network externalities.” “Product X must reach the tipping point so that network effects can take over,” etc. This sub-field is often treated as if it is more-or-less mature (and it may well be), but there is a serious theoretical ambiguity within the economic literature about exactly what a network effect is based upon. The original incarnation of the term deals with a good whose value increases as the number of […]

Free Speech in Databases: Martians on Facebook

The European Data Protection Directive contains a list of seven principles governing recommendations on protecting personal data. One of them–‘access’–includes the right to view data being held about us and correct them if they are wrong. The purpose of this is to ensure that data about me are not used in contexts that I do not want them used in. It allows me to complete incomplete information and correct mischaracterizations of my character that I would consider damaging if they were viewed and/or used by someone. Say, for instance, that someone had a database with my gender written down incorrectly. I […]

Facebook’s IPO–Outsourcing the push to shrink privacy

Facebook has been accused of shrinking the public’s “right to be let alone.” Soon they will be able to call on shareholders to demand that the government leave Facebook alone. If you’re a privacy advocate, this is worrying. Facebook’s IPO will increase the number of voices shouting on their side when regulators eventually threaten their pursuit of profit. Goldman may have a large stake right now, but if Goldman, Morgan Stanley, and shareholders-like-you own a piece of the pie, the desire to increase the size of the pie is spread more broadly. Facebook is our case study, but their situation […]

Cyber Negligence: Sending My Grandma to Jail

Confession time: Both my grandmother and I routinely fail to keep our home computer and web-browser security up to date. Are we bad ‘netizens’ if we leave the keys in the ignition of our unlocked computer? Is it reasonable to complain about Anonymous without ensuring that my laziness (her inability) isn’t giving them easy ammunition for their cyber-dissent? Is our activity criminally negligent, and if so why can’t we be punished for it? Last year, authorities in Spain arrested three suspects for allegedly downloading and booting up a program (called a Low Orbit Ion Cannon or LOIC) that lets the […]