Online economics
Archives: May 2008

Real-world URLs

In the midst of all the tedious tasks involved with moving countries, I had the following idea: Wouldn’t it be useful if you could use a web address for your postal address instead of a physical address? Then you just give the URL to people and when someone sends you a letter, they just write the URL on the envelope. Then the post office mail-sorting machines look up that URL and get your current physical address, and print it on the envelope.

Under this system, when you move, you just need to update your address once on the website, rather than telling many different people. I know most post offices will do mail redirection, but usually only temporarily. With an internet-based address system, it wouldn’t matter how long it was since you last moved, or how frequently you move.

by aaron. Permalink. Comments (4). Comments RSS.

Japan observations

Tyler Cowen lists some small observations on a recent trip to Tokyo. Here’s some of my own, having lived in Tokyo for the past 18 months:

All public schools use a chiming clock to tell the time, the chimes are identical for every school, and they play a gentle version of the chimes of Big Ben in London.

Advertisements on trains and in public places don’t highlight URLs any more, they show you a search box with what to search for.

People do not eat in public unless there is a seat to sit on. As a last resort, squat (do not sit) on the pavement. Walking and eating simultaneously is rude.

Phone cameras make a very loud sound when you take a picture (and you can’t turn the sound off), for obvious reasons.

Mobile phones often have a built-in flashlight, which is much more useful than you’d expect.

People who were walking often start to run when going up stairs.

In winter, drink vending machines sell hot cans of coffee as well as cold drinks.

There are very few public rubbish bins. Take your trash home with you.

Restrooms are generally pretty clean, but there is often no soap and/or no means of drying your hands. As a result, many people, especially women, carry a small hand towel, and some people carry soap.

Movies are very expensive, about 2,000 yen per person. Renting a DVD is very cheap, about 350 yen for an overnight new release.

You can easily buy cigarettes and beer from vending machines, although soon you will need an electronic ID to prove you are old enough.

At home, your electricity plan determines how much power you can use at any given instant (e.g. 30 amps). Exceed the limit and all the electricity to your apartment shuts off, without warning. If you want to increase the limit, you have to pay a higher monthly fee.

Car drivers are generally very careful and cautious. Bicycle riders are not, and often ride on the wrong side of the road, though red lights, etc.

by aaron. Permalink. Comments (9). Comments RSS.

Social networks: Open vs closed competition

Interesting things are going on in social networking right now, with all the major players trying to extend their services beyond their own sites to third-party sites (see here and here). One interesting thing about Google’s Friend Connect offering is that it allowed you to access your Facebook friends, as well as friends from other social networking sites. Now, in the name of ‘privacy’, Facebook has banned Friend Connect from doing this.

The basic issue here is whether social networking platforms want to compete with each other as ‘closed’ platforms, where a user of a platform can only access users of the same platform, or as ‘open’ platforms where a user of a platform can access users of all platforms. For competition between similarly-sized platforms, openness actually reduces the intensity of competition, and so platforms should prefer to be open. With open platforms, a price rise hurts the platform that raises its price less than with closed platforms, since the users who do not switch to a competitor as a result of the price rise can still access those who do switch, so the value of the platform to the remaining users does not fall. Openness increases the incentive to raise price (softens competition), which should increase profits. Of course, social networks currently compete in non-price dimensions for users, but the basic idea still holds.

On the other hand, openness makes the industry more stable and less prone to ‘tipping’ towards one platform or another. Thus while openness softens competition, it also makes it less likely that a single network will emerge as dominant. Whether a platform wants to be open with its competitors or not depends on whether it thinks it can win the battle for dominance in the long run. If not, better to be open with your competitors and accept a slice of the pie rather than no pie at all. If yes, better to be closed so as to try to force your competitors out, and eventually you might get to eat the whole pie.

It’ll be very interesting to see how this plays out. Expect to see a lot more strategic manoeuvring before it’s over.

by aaron. Permalink. Comments (0). Comments RSS.

Bang for buck

I was a little puzzled when I read this article saying that Japan is giving 10 billion US dollars in aid to African nations to tackle climate change. The article gives very little details, but I wonder if this is the best use of funds. If the objective is reducing climate change, wouldn’t spending 10 billion dollars domestically in Japan give a bigger bang for buck, since emissions in Japan are much higher than in Africa and probably easier to reduce? And if the objective is African welfare, wouldn’t 10 billion dollars of food-related aid improve welfare more than reducing climate change? Obviously I am basing this opinion on very few facts, but it seems to me that mixing two policy objectives together like this is a suboptimal way to achieve either of them.

by aaron. Permalink. Comments (0). Comments RSS.

Moving

In a week we’re moving from Tokyo back to Auckland, New Zealand, so blog posts may not be very regular for the next couple of weeks.

by aaron. Permalink. Comments (0). Comments RSS.
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