This talk discusses basic economic concepts and their impact on design, using examples from the internet to illustrate.

2. impacts Economics Design on the Internet

8. Demand Curve, or How Consumers Think

9. Supply Curve, or How Companies Think

10. How Do We Decide?

13. What Makes a Good Market: Property rights are protected from: Reinventing the Bazaar, A Natural History of Markets ; by John McMillan

14. What Makes a Good Market: Competition is fostered from: Reinventing the Bazaar, A Natural History of Markets ; by John McMillan

15. What Makes a Good Market: People can be trusted to live up to their promises from: Reinventing the Bazaar, A Natural History of Markets ; by John McMillan

16. What Makes a Good Market: Side effects on third parties are curtailed from: Reinventing the Bazaar, A Natural History of Markets ; by John McMillan

17. What Makes a Good Market: Information flows smoothly from: Reinventing the Bazaar, A Natural History of Markets ; by John McMillan

25. Search is the main means of TRANSPARENCY on the internet But data is the source of it.

27. Before After

35. one day soon maybe ... Semantic linkages are the main means of TRANSPARENCY on the internet But data is the source of it.

36. Whatever can be TRANSPARENT will be TRANSPARENT Whatever can be DIGITAL will be DIGITAL

52. possible variables: Date movie, chick flick, “mindless fun,” keep the kids busy, viewer age, anchoring biases, etc.

57. “ The internet is just one large copy machine”

58. Distribution costs are almost nill

68. Perfect (Commodity) Markets Assume Cost to Produce Increases with Quantity Supplied

70. In Information Markets Consumers Win! Cost to the Producer Does not Increase with Quantity Supplied

71. The Great, Ongoing Information Good FIRE SALE the price of many information goods will be driven to zero ... or the cost of looking at advertising

72. The Great, Ongoing Information Good FIRE SALE some caveats: intellectual property rights fixed costs of production complimentary goods fidelity paying for a hard copy no ads etc.

84. The GREAT “Experience-ization” companies want their (information) goods to be valuable

85. Digital features and functionality ... ... are also information goods ... ... and subject to the same economic rules ... ... namely that someone can do it cheaper.

100. “ Long tail” aggregation of desire

101. Aggregation of buying power

125. Thank you for attending (and thanks to Wikipedia and The Economist for my MBA). Questions ...?