What should I ask Hal Varian?

I will be doing a Conversation with him, no associated public event.  So what should I ask?


I'm curious what Hal Varian has to say about the missing pieces concerning (near) zero marginal cost in economic theory. A zero marginal cost society was postulated by Jeremy Rifkin. VC Albert Wenger has a similar view.

Is Wooster, Ohio economically inefficient? Should its population be relocated to large cities and pressed into the service of big businesses?

Just reviewed his google scholar profile https://scholar.google.ch/citations?user=WbYQGjcAAAAJ&hl=en&oi=ao

There's a 1994 article from the Internet congestion problems. https://deepblue.lib.umich.edu/bitstream/handle/2027.42/50464/Pricing_the_Internet.pdf?sequence=1&isAllowed=y

He's very smart . His insight on internet congestion 25 years later would be much appreciated.

Is big data overrated? What is the next step in the evolution of big data? What are the drawbacks to electronic systems that exhibit increasing returns to scale?

And with capabilities like WiFi6/5G and sensors, what tools/processes are being developed to be able to efficiently and affordably deal with the ever increasing volume of data, beyond say teams of data scientists? What are good examples of where masses of data have, after transformation, created commercial and social value?

Have economists at Google had any effect on the design of the accounting system there, creating new types and ways of traditional accounting information being organized? (I'm curious about how economists interact with finance and accounting staff.)

(1) Does the success of the Chinese tech unicorns, following China's heavily protectionist internet policy, undermine industrial organisation theory and suggest that there is some role for industrial policy?

(2) Why is Google's net margin so low, when so much of it's revenue comes from core products they developed more that a decade ago? Is it suffering from governance issues, and pursuing the founders' interests rather than shareholders?

(3) Are Google customers overestimating the impact of ads on sales - http://www.davidreiley.com/papers/AAA.pdf

(4) If you were a young entrepreneur, what industry would you look to improve upon using mechanism design tools?

(5) Do you believe the thesis that antitrust authorities are too lenient at the margin when reviewing horizontal merger cases?

What does he consider to be the costs of climate change? Or, when does climate change become such a big problem that companies who are not in the energy business (like Alphabet/apple/wallmart), but are big enough to have an impact, are inclined to come up with their own solutions? Surely, at a certain point a companies strategy will be determined by the earth its living on having any future of a stable world economy at all.

Does Google have a better read on inflation than the government?

What’s the future of antitrust in the digital age? Do the antitrust laws need to be revised? Is consumer welfare still the appropriate guide for antitrust enforcement, or are there other social and economic goals that should also be considered?

+1 to antitrust questions. Basically, ask him the antitrust questions that you asked Paul Krugman.

see https://www.ft.com/content/ad4188dc-872d-11e6-a75a-0c4dce033ade

Consider today’s leading tech companies: Google, Amazon, Facebook, Microsoft and Apple. They are not stuck in silos or hemmed in by a single business model. Instead, they compete intensely among themselves. For consumers this boils down to tangible benefits: products and services are better, faster and cheaper than ever before.

Information Rules (Varian's book applying economic theories to information-based technologies) came out in 1999. What have you observed since 1999 that would result in material changes in the book?

+1 on this. Information Rules is a great book, and much still relevant. Any new insights though?

He rose in economics in the golden age of theory, and now is in a very prominent applied position. What has been gained and lost for the discipline in the shift to more data-focused training for new economists?

You could ask him what he thinks the impact of automation on jobs will be by 2029 and what he thinks of the Great Stagnation. Ray Kurzweil still thinks there will be strong AI in 2029...

Oh, Kurzweil is 71 and has been at Google since 2012.

Ask him what he thinks are the biggest barriers to entry in the Internet environment. I gather that he thinks that scale in terms of big data is over-rated as an entry barrier.

You could ask him for his thoughts on Google's handling of the James Damore situation, but I doubt that he would answer.

You could ask him whether he thinks there is another tech bubble going on.

Speaking of bubbles, you could ask him what he thinks about blockchain.

You could ask him how working in a firm has reinforced or altered his views of microeconomics, industrial organization, or econometrics

+1 on the last question. Academic economists have been accused for at least 50 years of not knowing how businesses really work. It would be very interesting to get the perspective of an excellent academic who sullied himself in the real world.

How would you price privacy as a product or feature. Would you have to buy privacy to get it or would you have to pay someone to take it from them.

What economic experiments has he run which surprised him.

What principals of microeconomics does he know question based on his observation as to how consumers behave.

How has EU privacy regulation affected innovation or new products.

now knot know in line 3

Given that there may be negative externalities and unintended consequences from Google's products, what public good or charity would he contribute to or encourage others to support to deal with them.

Does he agree or disagree with some of the testimony his Co-Author Carl Shapiro has given in recent antitrust cases.

Do we need more economic models? Frontier research has downplayed economic modelling in favor of identification strategies--usually the model is an afterthought. Should the model regain status?

Bill Gates last year said that economics no longer explains the modern economy (https://www.gatesnotes.com/Books/Capitalism-Without-Capital), and a large audience saw this as an attack on the validity of economics. In reality, Gates was focusing on one model, when another one would have answered his question (ironically, the model of monopolies). How can we improve economic education so people understand that economic models are still important?

Related to that last one, maybe something related to his thoughts on Dani Rodrik's Economics Rules.

To what extent could Google's tracking of individuals' mouse use patterns result in more accurate insurance premiums?

I like that -- more subtle than just asking, "How much personal stuff does Google know about every individual soul on Earth"

It has always struck me as paradoxical that an economist who derives a lot of his fame from textbooks which are notoriously light on examples or applications went to the private sector to do very applied work. I'd love it if you could explore this theme with him ("Are real-world examples in textbooks overrated?").

In retrospect, has Google done evil? A question to highlight an example of a good intention with an unintended consequence

Indeed. Google is working with the Government of China to develop tools to enslave its population. If you're not willing to make the case that slavery is objectively good, why is it OK to make and sell the tools of enslavement?

Can anything be done to stanch the decline in local news jobs? Journalists' labor is an expensive way to produce news in information markets where news can become a commodity. Journalists also compete against information that is available at no cost from search engines and social media.
But local journalists -- those that are left -- are the only reliable source of sustained local news coverage. They provide vital news and hold accountable government and other institutions.
Google has provided grants to support efforts to stem the decline. Google is piloting a tool for news sites so they can market digital subscriptions.
But it's not Google's responsibility to fund local journalism. Is there anything that local news companies can do that might reduce costs and increase revenue without continued reductions in journalist jobs?

This is a little off subject, but Carl Shapiro, Varian's co-author, is an expert on competition (having served in both the Dept. of Justice and the FTC). Here is the conclusion of the chapter he wrote in The Rate and Direction of Inventive Activity Revisited (Josh Lerner and Scott Stern, editors) about competition and innovation, using the contrast between Arrow's view (big business prefers the status quo and has less incentive to innovate) and Schumpeter's view (much of innovation is attributable to big business):

"Yes, Arrow did hit the bull’s eye: a firm with a vested interest in the status quo has a smaller incentive than a new entrant to develop or introduce new technology that disrupts the status quo. Schumpeter was also quite correct: the prospect of obtaining market power is a necessary reward to innovation. There is no conflict whatsoever between these two fundamental insights.The unifying principle, richly supported by the empirical literature, is that innovation, broadly defined, is spurred if the market is contestable; that is, if multiple firms are vying to win profitable future sales. This basic principle can take us a long way in evaluating the impact on innovation of horizontal mergers and of unilateral conduct by dominant firms." https://www.nber.org/chapters/c12360.pdf

We used Hal Varian as the main text in my Intermediate Micro class years ago. This is one talk that I will not be missing.

That said, I would like you to ask him about the notorious culture that is Google. Are there any basic microeconomic concepts that seem to be under a magnifying lens? For those of us who where suits and ties and work in cubicles, Google can sound a lot like Narnia.

I'd love to get his take on Soshana Zuboff's critique of Google and Varian's own writing, most recently featured in Zuboff's Surveillance Capitalism (for see also https://cryptome.org/2015/07/big-other.pdf)

I'd also like his take on why he was happy see Comscore underestimate Google's market share in search "from an antitrust perspective," a quote attributed to a memo of his that was part of the 2012 FTC investigation (http://www.wsj.com/articles/inside-the-u-s-antitrust-probe-of-google-1426793274)

what's the Hype surrounding Amazon hiring a bunch of economists?

He must have been in many hiring committees at Berkeley. As Google Chief Economist, he must hire economists to work in his group. What is the difference in the way he chooses the best applicants? Put another way, is the rank order of the latest batch of PhD Economists the same when hiring for University faculty as when hiring in the tech sector?

Do our intuitions of anti-trust need to change relative to what we thought in 1999?

Just make the whole conversation about antitrust. Seriously.

Ask him why he wrote a dry microeconomics textbook instead of one which makes the subject come alive ... like the one you co-authored with Alex.

Please ask him about the market power debate.

I heard years ago that he and Shapiro were going to update Information Rules to reflect the new realities of the digital economy. It's now 20 years since and it would be a great time to do that. Any plans?

Big data allows more effective price discrimination and tacit price collusion than before. AIs have been shown to find tacit price collusion outcomes quickly in simulations.

What happens next, and is this a policy issue worth trying to resolve? Are tech companies developing better customer side tools to materially reduce search costs and find kinks in price discrimination strategies? This better price discrimination outcome looks like it's spurring investment, but is this happening in markets that can benefit consumers, or just recutting total surplus in oligopolies (like airline tickets and yield management systems)?

And if companies can effectively find cooperative collusive pricing equilibriums with AIs, how do we prosecute cartels, or does cartel behaviour disappear to be replaced with tacit cartels?

His "Intermediate Microeconomics" textbook was used in my graduate public policy program. Obviously, he wrote the book long before working at Google. Given his career in Silicon Valley, what would he say differently (if anything) or additionally to aspiring public policy makers, analysts, and scholars learning the basics of economic theory/practice from his textbook today?

What does he think of this op-ed,
where Amy Webb sees products and services being gradually bundled into three large information families -- Google, Amazon, and Apple -- with little interoperability between them, consumers will have to pick which family to belong to.

How plastic is Google with regards to differences in cutlure around the world? How much more are they prepared to do, beyond translating strings in an offering? Treatment of China is a special case here. What about assumptions of European countries, ”Sweden is basically like the US in this respect, let’s roll out G-product there and hope for a good enough fit”

I like this question! Even limiting the question to pure search engine results, do patterns of clicks and links have the same predictive power in different cultures? E.g. maybe in Freedonia people surf fairly randomly and follow links to random largely unrelated sites whereas in Elbonia they click on a link to get more information and then immediately go back to their original page.

We know that hardware costs are decreasing, but the supply of data is increasing as well, especially at Google. Over time, facilities, compression algorithms, etc. must be managed. Has all of this pushed the marginal cost of data storage up or down?

Look at Shoshana Zuboff's new book The Age of Surveillance Capitalism and ask pointed question about what Google really does with all the information they have about me, especially that which I did not know they were collecting. Listen to her in discussion with Kara Swisher on Recode podcast https://www.recode.net/2019/2/20/18232469/shoshana-zuboff-age-surveillance-capitalism-book-google-facebook-privacy-data-kara-swisher

What's a possible future where AI takes a lot longer to roll out?

Does Google use query data to create products like Netflix uses consumption data to create shows?

Can he update his Bots and Tots idea for 2019?

He's said (https://youtu.be/EkWjlwrJeM8)
to Thaler that he was once skeptical of Behavioral Economics but now, "If you're going to engage in business, if you're going to understand human behavior, you have to start with human behavior. You have to look at how people behave and adjust to that even though you 'know' they should be behaving differently.", has he become a bigger BE fan or experienced a similar transition?

Is the data we freely give, for example though our voice use of Google home mini or the data it collects about our Spotify lists, the new low hanging fruit?
Has there ever been a hugely profitable business or corporation that hasn't required free inputs to function so profitably?

Could you ask him "What is your best estimate for how large/small the effect of fake news really is on influencing elections etc?" The common narrative is this is a huge problem, while the academic studies acknowledge there is some influence but that the effect is relatively small.

what fields of study would Hal tell his kids to focus on to best em prepared for the future

How can he sleep being the master behind surveillance capitalism?

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