A Lasting Legacy:
“Information Rules” by Carl Shapiro and Hal Varian remains relevant despite being written 15 years ago. It offered timeless economic principles applicable to the emerging information economy.

Prescient Insights:
The book relied on historical examples and well-tested theories, providing a solid foundation for its principles. It wisely avoided predictions, acknowledging the rapid pace of change in the technology landscape.

Competing Perspectives:
In contrast to Kevin Kelly’s “New Rules for the New Economy,” which promoted radical changes, “Information Rules” focused on more fundamental economic principles.

Emerging Trends:
If written today, the book would likely emphasize advertising, particularly search-targeted advertising, as a major business model for the internet economy. The chapter on auctions and market design, removed due to space limitations, would have been particularly relevant in light of the subsequent growth of eBay and other online marketplaces.

Infrastructure and Policy:
The book expressed optimism about the Telecommunications Act of 1996 and its potential to promote competition. However, in retrospect, the authors acknowledge that aspects of the act, such as TELRIC and unbundled elements, did not work as effectively as anticipated. The book’s focus on shrink-wrapped software distribution did not fully anticipate the importance of digital distribution and broadband in the evolving landscape.

Recommender Systems:
The emergence of recommender systems and their role in helping people navigate the vast information landscape.

Platform Competition in Two-Sided Markets:
Further exploration of platform competition in two-sided markets, building on the foundational concepts discussed in Information Rules.

Patent Issues:
A dedicated chapter on patent issues, given their significance from both economic and policy perspectives.

Pricing, Copyrights, and Versioning:
Revisiting the topics of pricing, copyrights, and versioning in light of evolving technologies and business models.

Lock-in and Network Standards:
Continued exploration of the concepts of lock-in and network standards and their relevance in contemporary contexts.

Network Effects:
Examining how the concept of network effects has evolved since the 1980s and 1990s, particularly in the context of social networks and the sharing economy.

Reassessing Previous Assumptions:
The proliferation of digital technologies, particularly the internet, has led to a need to reevaluate the original concepts presented in “Information Rules.” Market dynamics have transformed, creating new industries and opportunities that weren’t foreseeable at the time of writing.

Themes for Future Research:
The participants discussed several themes that warrant further exploration in future research: Social networks: Assessing the economic and social implications of this burgeoning industry, including privacy concerns, user behavior, and advertising. International aspects: Investigating the unique challenges and dynamics of digital markets that transcend national boundaries. Co-opetition: Analyzing how companies collaborate and compete with complementors within their ecosystems.

Patents and Intellectual Property:
The conversation highlighted the growing significance of patents, particularly standard-essential patents (SEPs). Participants agreed that the book’s framework for pricing and rent extraction in SEPs remains relevant. Ongoing developments in patent tradability, patent assertion entities, and the integration of intellectual property with other industries require further examination. The slow response of regulatory bodies to these changes underscores the need for adaptive policies and regulations.

Case Study: Netflix
The rise of Netflix exemplified the book’s principles with its shift to a subscription model. Personalization and recommendation engines, powered by data analytics, have become key drivers of success in the digital era.

Google’s Competitive Advantage
Google’s dominance was attributed to learning by doing, a concept that emphasizes the cumulative improvements and knowledge gained over time. The low switching costs for consumers contrast with the advertiser side, where switching is more challenging, creating a dynamic that attracts users and advertisers. The potential for Google to leverage its search dominance to expand into adjacent markets, mirroring Microsoft’s earlier concerns, was also discussed.
Overall, the discussion highlighted the need for continuous research and analysis to keep pace with the rapidly evolving digital landscape. Revisiting concepts from “Information Rules” and exploring new areas of study will be crucial for understanding and shaping the future of the digital economy.

Google’s Success:
Built a large customer base and leveraged it to expand into other areas. A key factor in its success is the “give-it-away” strategy, providing free services to attract users.

Multi-homing in Networks:
Multi-homing refers to the use of multiple platforms or services simultaneously. Many modern services, such as ride-sharing apps, allow users to multi-home. Networks can coexist without exclusivity, challenging traditional notions of competition.

Standard Essential Patents:
Recent progress has been made in defining fair and reasonable royalties for standard essential patents. The concept of “reasonable” is based on pre-standard technology competition. There is a growing consensus on this conceptual standard.

Advertising and Competition for Attention:
Google’s text ads are effective due to targeted advertising based on user queries. Display ads have a harder time competing for attention and resort to techniques like pop-ups.

Two-Sided Markets and Network Effects:
Two-sided markets involve multiple groups of users with interdependent demand, such as consumers and app developers. The interaction of two-sided market effects, switching costs, and network effects can be complex. Economists need to further research these multi-layered interactions.

Net Neutrality and Credit Card Practices:
Net neutrality and credit card practices are examples of issues involving competition in two-sided markets. In the case of credit card practices, the Justice Department and American Express have competing perspectives. Courts need to balance the interests of different stakeholders in such cases.