Digital platforms—like Google, Facebook, and Amazon—are expanding and evolving in ways that present profound challenges for markets and society. Last week at Yale, over 60 top economists gathered to present the latest research findings as part of the Regulating the Digital Economy conference. At a time when nations are preparing to act against the potential harms presented by digital platforms, researchers set an ambitious agenda to help advance our understanding and provide practical insights for policy.
Steven Berry, Faculty Director of Yale’s Tobin Center for Economic Policy, set the stage with opening remarks. He highlighted how growth of the digital economy has, to date, outpaced economists’ ability to understand these markets or conduct the research necessary to support appropriate responses: “Digital markets present profound challenges for markets and society. A stronger theoretical and empirical basis in economics helps inform a regulatory response that avoids harms.”
Co-hosted by the Tobin Center and the Toulouse School of Economics (TSE), the gathering featured leading scholars in the digital market regulation field. Speakers included Nobel Laureate Jean Tirole, Chief Economist for the DOJ Antitrust Division Susan Athey, and the conference was led by Yale faculty members Dirk Bergemann, Fiona Scott Morton, and Katja Seim.
To date, market oversight has been handled through antitrust law and the courts, yet rules specific to tech could alleviate some potential harms presented by digital platforms. “Competition and antitrust law alone are not well suited to address the range of challenges presented by platforms,” said Nobel Laureate Jean Tirole, Professor at TSE and keynote speaker at the event. “The tools of regulation must be deployed, but must be done so well. Our collaboration with the Tobin Center mobilizes leading economists to take on essential research and brings it to policymakers, enabling better, more effective policy.”
The conference included cutting edge research on topics including media consolidation, competition in digital advertising, how competition regulators can use economic modeling, how to apply research to policy, markets for personal data, artificial intelligence, algorithmic recommendations, and the impact of enhanced privacy measures. The conference also featured discussions, panels, and workshops designed to build consensus around the research needed in regulatory economics to meet the moment of digital platform regulation occurring in Europe and the US.
The workshop builds on momentum from the Tobin Center’s recently launched Digital Economy Project, which aims to accelerate economic research on digital platform regulation, and inform digital market regulation. The project is working to improve the theoretical understanding and empirical knowledge of digital markets, which is surprisingly limited, despite the fast growth and ubiquity of these markets.
The Digital Economy Project prepares and expands the community of economists who study these issues, and is working to reduce the time from research to impact through:
- Engaging directly with policymakers: Affiliated faculty serve as trusted, independent advisors to top legislators and regulators in Europe and the US on how to craft effective policy responses to digital market issues.
- Working with the media to inform the public dialogue: The New York Times recently published an article framing issues of digital platform regulation consistent with the themes of the Digital Economy Project. President Biden echoed similar issues in his recent Wall Street Journal Op-Ed.
- Bringing insights to the US court system: Run by senior fellow David Dinnielli, Tobin’s partner clinic at Yale Law School brings economic insights into judicial opinions. The clinic partners with public interest and governmental clients so that students learn to address specific digital market harms through legal and public policy interventions.
- Producing cutting edge research: Tobin’s Policy Discussion Paper series is a collaborative effort of experts in economics and regulation who have studied, and are committed to the improvement of, competition in digital markets. In the US, this research has been credited by the Federal Trade Commission (FTC) as an indispensable resource driving policy, and has been critical to the US Department of Justice’s (DOJ) most recent major antitrust case with Google.
“Meeting the scale and urgency of digital market challenges requires collective action among economists,” said Gene Kimmelman, Senior Policy Fellow at the Tobin Center. “Our Digital Economy Project is providing policy makers the theoretical foundation that is essential to effective regulation and expanding the community of trained regulatory economists to work on this critical issue.” The Digital Economy Project includes a consortium of the world’s leading theoretical and regulatory economists, coordinated by Yale professors and in partnership with a similar initiative at TSE. Participating consortium members hail from such universities as Columbia, Harvard, MIT, Munich, Stanford, and UCL. The Sloan Foundation, Omidyar Network, and the Knight Foundation have generously contributed support for this project at the Tobin Center.
Nat McLaughlin, Senior Program Manager at the Tobin Center, planned and ran the conference. Please reach out to him with any questions or for more information about the conference (firstname.lastname@example.org).