Economics at Yahoo!

I've blogged before about Hal Varian, Chief Economist at Google, and how his role in the organisation has been central to Google's business model. I have also mentioned pioneering work at Yahoo! Research on the effectiveness of online advertising, the battle between Google, Yahoo! and Bing in the economics of internet search, and the statement by Yahoo! Research that they routinely compete for talent with the top ten economics departments in the world.

However, it has only now come to my attention that Varian has a counterpart at Yahoo! The economist in question is Preston McAfee, on leave from the position of J. Stanley Johnson Professor of Business, Economics, and Management at the California Institute of Technology. At Yahoo!, Professor McAfee is Vice President and Research Fellow at Yahoo! Research in Burbank, CA, where he leads a group focused on microeconomics research. Here is a list of recent publications from the Microeconomics and Social Systems cluster at Yahoo!

Professor McAfee wrote Introduction to Economic Analysis, a free, open-source text that spans both principles and intermediate microeconomics. In 1994, the FCC in the USA auctioned access to a number of radio frequencies for new communications services, using an auction designed by Paul Milgrom, Robert B. Wilson, and Professor McAfee, and raised over $17 billion. This auction design was copied around the world. McAfee, Milgrom, Wilson and John McMillan (1951-2007) formed a company, Market Design, Inc., that advises governments on how to maximize the return from sales of radio frequencies, mineral rights, airports, and other assets.

Returning to Yahoo!, The Register magazine describe the company's Right Media exchange — a display advertising marketplace that matches advertisers with publishers and ad networks — as (by one measure) the largest exchange in the world, running over nine billion auctions each day. Finally, the Yahoo! Advertising Blog is also an interesting read; the current post - Mad Men No More - features a discussion by "advertising’s new guard" on how they are re-defining the industry.

Technology and the brain

There has been a lot of press coverage recently on how computer usage affects the brain. One of the main proponents of the view that there are negative effects is Baroness Susan Greenfield who believes that the predilection for online living causes shallow, fragmented thinking, “Computer use could be cutting attention spans, stifling imagination and hampering empathy, as a result, the parts of the brain involved in these traits will not develop properly.” Critics argue that her assertions are no more than speculative, with no scientific evidence to support it. A recent paper in Neuron written by cognitive scientists provides an overview of the evidence. They point out that "'technology is damaging the brain / eating our children / harming our culture’ stories are over-simplified to the point of absurdity. No-one could get away with a scare story about the whole of ‘transport’ but you can with ‘technology’ because it plays to our anxious stereotypes". It will be interesting to watch the debate unfold.

Children, Wired: For Better and for Worse

Daphne Bavelier, C. Shawn Green, Matthew W.G. Dye

Summary

Children encounter technology constantly at home and in school. Television, DVDs, video games, the Internet, and smart phones all play a formative role in children's development. The term technology subsumes a large variety of somewhat independent items, and it is no surprise that current research indicates causes for both optimism and concern depending upon the content of the technology, the context in which the technology immerses the user, and the user's developmental stage. Furthermore, because the field is still in its infancy, results can be surprising: video games designed to be reasonably mindless result in widespread enhancements of various abilities, acting, we will argue, as exemplary learning tools. Counterintuitive outcomes like these, besides being practically relevant, challenge and eventually lead to refinement of theories concerning fundamental principles of brain plasticity and learning.