dago78

I am well aware that the printed media no longer have a monopoly on the production and distribution of information.  In fact, much of the consumption of information has shifted online.  As a result, many of the mainstream print publication felt that it is necessary to have an online presence as well.  Regardless of whether it was simply a matter of product diversification or a more conscious decision to attract the growing number of audience that have shifted online, having an online presence presented a number of challenges.  One of them relates to the primary feature of being online, i.e. the products or services are now more or less free.  This situation necessitated a rethink of the business model for online media.  If the product is free and consumer contribution is lost, additional burden is put on alternative source of funding.  Traditional print media has relied on advertisement to support its business model.  While advertisement should certainly continue to be a key component to the new business model, the advertisers themselves are looking at the new online media in a completely new light as well.   Online newspaper becomes unbundled; now each story has to stand on its own and this might considerably be less attractive to the advertisers.  Furthermore, one story might not be as attractive as the next one and to determine which one would be best to place their advertising becomes an unwelcome guessing game.  To complicate matter further, there are online competitors vying for the advertisers’ attention.  They are the pure non-print online media, such as the bloggers and the news aggregators.

While the challenges are certainly mounting for the journalist and the media, what does it mean for the consumers?  Technology has allowed us to access information easily and cheaply; as noted most of the time it is all are free now.  The consumers are probably spending more on the technology, either the medium or the connection.  Computers, tablets, smart phones are essential mediums to access online information; while internet connectivity and cellular coverage are the connectors.  In addition there are hosts of other paraphernalia that enhances the online experience.  There is no doubt that the technology has been wonderful, but has it increased the quality of the information?  What has the decentralization of information really mean for the consumers?

The print media through its journalist and editors used to monopolize the information distributed to us.  Granted this group of people had certain ethical standards, but still they were arbitrarily deciding for us the information that we can receive.  Is the online distribution of information any different?  There is relatively less editorial control and censor for the online media, but there is still discretion for the online journalists to control the message.  This is true even for news aggregator, such as the Huffington Post.  They are providing a great service of selecting top news for our consumption, but there are filtering based on their judgment.  How about the blogs?  It has been noted that blogs rely considerably on its readership, its community, for quality control.  A blog posting go up before an editor sees them.  Only if a post is deemed by a reader to be false, defamatory or offensive does an editor get involved.  Blogs might be the next best thing than actually going direct to the source.  Again what does it mean for the consumers?

I believe democratization of the flow information and the availability of options are wonderful.  The key notion for this change is empowerment.  Empowerment of the consumers that they have options and they can decide on which information they want to consume.  Democracy essentially grants a right, a right of self determination.  With this right a person is empowered to make a decision; if he/she decides not to exercise this right that is perfectly within his/her right too.  The fact that technology has allowed this transformation in the media sector warrants an appreciation.

My pick for the article evaluation exercise is a Wikipedia article on cartel.  I have familiarity with the subject as one of my practice areas as a lawyer is antitrust/competition matters and cartel is one of the unfair market practices which is prohibited by the Antitrust Law.  Furthermore, I have written a paper commenting on the Cartel Guidelines of Indonesia.

Surprisingly when searching for cartel, Wikipedia has a number of entries for cartel; ranging from the  conventional entry as an activity that distort fair market practices to entries for cartel as a music band, album, rap group, deli, and even a particular design for a clock.  The fact that there is a number of ‘cartel related’ entry tickles me to launch my first comment.  I wonder whether Wikipedia should provide separate entries for common term such as cartel into, for example, one which is associated with a substantive meaning (i.e. market distortion practice), and one which is associated with cartel as a name or design, etc. (i.e. name of an album, clock design).  Cartel has also been associated with a particular group in Mexico and Latin American countries who are linked with the drug industry; perhaps another associated category of Wikipedia entry on its own.  One of the considerations for a Wikipedia article is notability; Wikipedia should not be an encyclopedia for just any random subjects, it should be an encyclopedia about notable subject.  In my bias and limited perspective, cartel the band, for example, does not have the same level of notability with cartel as a market distorting practice.

On the comprehensiveness of the cartel article I have three substantive comments.  First is to add elasticity of the demand as an integral element when formulating an argument for cartel practices; second, to add a ‘business association’ argument as possible lead in proving the existence of cartel practices, and lastly, to highlight the importance of putting the ‘burden of proof’ on the businesses facing cartel allegation, including their welfare argument(if any).  The three comments reinforce one another and indirectly illustrate how difficult it is to prove the existence of a cartel.

 To further describe the first comment.  As much as cartel is about the market power of a group of producers, it ultimately has to account as well on certain consumer behavior.  If over a period of time a group of producers is able to estimate a steady level of demand and such demand remain stable even with a price increase or fluctuation, the producers can deduce that the demand is relatively inelastic.  With inelastic demand there will be incentive for the producers to behave as a cartel as they can predict the level of production and price, and ultimately the amount of profit that can be generated.  Conversely, if the demand is relatively elastic, sensitive to price increase and fluctuation (e.g. there are substitute goods), there is no incentive for producers to behave as a cartel even if there are only limited number of producers for the particular good.     

In closing, I would suggest adding a Microeconomic textbook by Robert Pindyck and Daniel Rubinfeld into the bibliography; one of the sections of the book provides a comprehensive description of contestable market structure, and the contrast with non-competitive market structure.  Lastly, the cartel article currently does not have an illustration; maybe an illustration of a vibrant contestable market can be added.

When finally reaching page 387 of the book I was overwhelmed; In the Plex is both inspiring and disturbing.  It reminded me of Dr. Ian Malcolm’s expression (Jeff Goldblum’s character in The Lost World, a sequel to Jurassic Park), when he was once again (unwillingly) thrust to the prehistoric period – “it always started with amazement, then come the running and fighting for survival” (not an exact quote, but it went along that line; the context was when they were about to run and start fighting the T-Rex and other prehistoric carnivores). 

As a novice on the subject of technology, particularly on the reach of Google beyond search, Steven Levy has presented a comprehensive and gripping biography of Google.  The reference to Dr. Ian’s expression summed up my personal impressions of reading the book; amazed by the development of the search engine, the economic model and the working culture, but perplexed by the notion of allowing Google to access too much personal information, retention of such information over extended period and other privacy related issues (the running).  Furthermore, thought that Google was probably going too far with its attempt to digitize the books and competing with Facebook (the fighting).     

The philosophy behind Google, such as making human knowledge accessible, making the world a better place and maintaining trust were amply discussed, and conveys Google’s values.  The translation of search into other languages is a great example of allowing access of knowledge to non-English speaking communities.  Language is indeed a barrier.  During the colonial period, one ways of limiting access to justice, for example, was by writing the court procedures and convening the court process in a foreign language.  Language barrier, together with distance and legal aid were ranked as among top three barriers to justice.     

It is surprisingly easier to follow the technical descriptions of the various innovations that Google undertook, such as PageRank and Gmail.  While, the business/advertising model is not immediately evident to me why one would want to advertise in such a way and how the auction process was making it even more compelling.  With so many subscribing to the proposal it must be largely lack of comprehension on my part; I must experience it directly and often to understand it better.

It was suggested that after 10 year Google appears to have wane from its search focus and started to contradict its values.  Pressures from new innovators such as Facebook seem to have compelled Google to enter social media, an area which does not directly correlate with search.  Is there a justification for its venture into social media or is there indeed a shift in Google’s philosophy?  There are lessons from recent history; the 2008 financial crises.  The pundits have noted that the derivatives related financial crises were driven by either “fear” or “greed”.  Upon closer scrutiny there is not much difference in the two behaviors.  The effect is similar; the desire to continuously grow bigger, to outrun the competitors.  The investment banks, both in the US and globally, lost sight of the intended and original design of derivatives as an instrument to mitigate risks.  The fear or greed of the banks has instead turned derivatives into the ultimate risk itself.  Something that Google might want to take note as it yearns to grow even bigger, to “googolplex”.

The key messages of the book are twofold.  First, new technology has enabled new kinds of group-forming with relative ease.  The new groups are social media groups that come together simply because the issues connect the members; disregarding the formalities of conventional groups, such as personal connection.  Social media highlights how inter-connected we are to one another today.  Second, the book offers a framework for successful utilization of social media; a combination of promise, tool and bargain.  The promise represents the “why”, the consideration for joining the group and the cause.  The tool represents the “how”; this is the technological aspect of the process.  Social media and the accompanying technology is merely a tool; social media does not create the collective action that it potentially able to generate, it merely remove the obstacles to it.  Lastly, the “bargain” is the rules of the game, how the interaction and collaboration will be conducted among the group members.

Social media has significantly reduced the cost of group activities.  The technology has also provided the platform (if desired) for the group to carry-out its activities without any physical interactions.  These are among the advantages of social media.  But there are also challenges.  One of them is on the degree of participation by the group members.  There is no expectation on how much a member should contribute to the group, it is completely discretionary and accepted that there will be imbalance among the contributors (power law distribution).  Another challenge is on how to arrive at collective decision; groups are still vulnerable to breakdown in the interaction among its members. 

I agree with the challenges noted above; these are similar with conventional groups.  Discretionary participation easily gives rise to the question of the “size” of the group.  This is important as it gives the legitimacy to push for collective action.  I have experienced where a grass-root civil society movement has been easily undermined by the Government simply because it is unable to identify its actual members (i.e. base of support).  The civil society might indeed have the support of the grass-root communities but was unable to demonstrate it.  The Government on the other hand can easily point to the election data or latest poll to show concretely the basis for its support.  On the issue of collective decision, I can imagine how ultimately it can be driven by just the few active participations; raising issues of whether the non-active has actually delegated their rights and whether there is ‘buy-in’ from the non-active on the decision for action.        

Looking at the advantage and disadvantage of social media for collective action is comparable to considering whether it would be beneficial to have international trade.  Key concepts such as comparative advantage and trade-off are applicable.  Does social media provides comparative advantage and the right trade-off for collective action as opposed to other media?  Social media gives the flexibility of non-physical interaction and much lower cost than conducting physical meetings, but does it make it easier to arrive at collective decisions when lacking personal connection?  One can argue that collective action requires the right level of bonding and rage to further a cause.  As aptly concluded by the book, Revolution does not happen when society adopts new technologies – it happens when society adopts new behaviors.