Understanding Big Data: Data Calculus in the Digital Era

86 Pages Posted: 25 Feb 2021

See all articles by Long Chen

Long Chen

Luohan Academy; Cheung Kong Graduate School of Business

Patrick Bolton

Columbia Business School - Department of Economics; Centre for Economic Policy Research (CEPR); National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Bengt R. Holmström

Massachusetts Institute of Technology (MIT) - Department of Economics; National Bureau of Economic Research (NBER); European Corporate Governance Institute (ECGI)

Eric Maskin

Princeton University - Department of Economics; Harvard University - Department of Economics; Massachusetts Institute of Technology (MIT) - Department of Economics

Christopher A. Pissarides

London School of Economics & Political Science (LSE); Centre for Economic Policy Research (CEPR); IZA Institute of Labor Economics; Hong Kong University of Science & Technology (HKUST)

A. Michael Spence

Stanford Graduate School of Business

Tao Sun

International Monetary Fund (IMF)

Tianshu Sun

University of Southern California - Marshall School of Business

Wei Xiong

Princeton University - Department of Economics; National Bureau of Economic Research (NBER)

Liyan Yang

University of Toronto - Rotman School of Management

Yadong Huang

Luohan Academy

Yong Li

Luohan Academy

Xuan Luo

Luohan Academy; Luohan Academy

Yingju Ma

Luohan Academy

Shumiao Ouyang

Princeton University - Department of Economics

Feng Zhu

Ant Financial

Date Written: February 05, 2021

Abstract

Information processing has been defined as “the change (processing) of information in any manner detectable by an observer, a process that describes everything that happens in the universe, from the falling of a rock to the printing of a text file from a digital computer system.” Human society has long realized that information processing and sharing are essential to the pursuit of physical, social, and economic well-being. Knowing and sharing information about one’s surroundings is essential to success in the physical world. Knowing and sharing information about one’s “neighbors” is essential to success in the social world. “Knowing-your-customers” (KYC) in order to serve them well is the supreme norm for success in the business world. Sharing that information – the Yellow Pages practice that makes certain personal information, such as name, telephone number, and address public -- has become a tradition in modern human relations.

The pervasive use of digitized information has reached a new height that we call the era of "big data." While this has led to unprecedented societal cooperation, it has also intensified three major concerns: How can we properly protect personal privacy in the age of big data? How do we understand and manage the ownership and distribution of benefits and risks arising from the use of data? Will the use of big data lead to "winner-take-all" markets that undermine competition to the detriment of consumers and society? These are the subjects of this report.

We focus on analyzing concrete evidence about "big data" to draw conclusions on its impact. As Nobel Laureate Ronald Coase (1994) suggested, it is important to step away from pure "blackboard economics" that tends to only live in [a theoretician's] mind: "what we need is more empirical work ... An inspired theoretician might do as well without such empirical work, but ... the inspiration is most likely to come through the stimulus provided by the patterns, puzzles, and anomalies revealed by the systematic gathering of data, particularly when the prime need is to break our existing habits of thought."

This viewpoint is particularly relevant because, unlike many production inputs, data has the properties of non-rivalry and non-separability. Unless an evidence-based, integrated and multi-stakeholder approach is adopted, users can be unintentionally hurt in the name of protection. We don’t want to "dismember the goose that laid the golden egg."

Keywords: big data, data economics, information economics, privacy, market competition

JEL Classification: A30,K20,K21,D8,L1,O30,O41

Suggested Citation

Chen, Long and Bolton, Patrick and Holmström, Bengt R. and Maskin, Eric S. and Pissarides, Christopher and Spence, A. Michael and Sun, Tao and Sun, Tianshu and Xiong, Wei and Yang, Liyan and Huang, Yadong and Li, Yong and Luo, Xuan and Ma, Yingju and Ouyang, Shumiao and Zhu, Feng, Understanding Big Data: Data Calculus in the Digital Era (February 05, 2021). Rotman School of Management Working Paper No. 3791018, Available at SSRN: https://ssrn.com/abstract=3791018 or http://dx.doi.org/10.2139/ssrn.3791018

Long Chen

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China
+86-0571-2688-8888-75520 (Phone)

Cheung Kong Graduate School of Business ( email )

Oriental Plaza, Tower E3
One East Chang An Avenue
Beijing, 100738
China

Patrick Bolton

Columbia Business School - Department of Economics ( email )

420 West 118th Street
New York, NY 10027
United States

HOME PAGE: http://www0.gsb.columbia.edu/faculty/pbolton/

Centre for Economic Policy Research (CEPR)

London
United Kingdom

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Bengt R. Holmström

Massachusetts Institute of Technology (MIT) - Department of Economics ( email )

50 Memorial Drive
Bldg. E52-271d
Cambridge, MA 02142
United States
617-253-0506 (Phone)
617-253-1330 (Fax)

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

European Corporate Governance Institute (ECGI)

c/o the Royal Academies of Belgium
Rue Ducale 1 Hertogsstraat
1000 Brussels
Belgium

HOME PAGE: http://www.ecgi.org

Eric S. Maskin

Princeton University - Department of Economics ( email )

Institute for Advanced Study
Einstein Drive West Building Room 318
Princeton, NJ 08540
United States
(609) 734-8309 (Phone)
(609) 951-4457 (Fax)

Harvard University - Department of Economics ( email )

Littauer Center
Cambridge, MA 02138
United States
(617) 495-4167 (Phone)
(617) 495-7730 (Fax)

Massachusetts Institute of Technology (MIT) - Department of Economics

50 Memorial Drive
E52-391
Cambridge, MA 02142
United States

Christopher Pissarides

London School of Economics & Political Science (LSE) ( email )

Houghton Street
London WC2A 2AE
United Kingdom
+44 20 7955 7513 (Phone)
+44 20 7831 1840 (Fax)

Centre for Economic Policy Research (CEPR)

London
United Kingdom

IZA Institute of Labor Economics

P.O. Box 7240
Bonn, D-53072
Germany

Hong Kong University of Science & Technology (HKUST) ( email )

Clearwater Bay
Kowloon, 999999
Hong Kong

A. Michael Spence

Stanford Graduate School of Business ( email )

655 Knight Way
Stanford, CA 94305-5015
United States

Tao Sun

International Monetary Fund (IMF) ( email )

700 19th Street, N.W.
Washington, DC 20431
United States

Tianshu Sun

University of Southern California - Marshall School of Business ( email )

3670 Trousdale Parkway
Bridge Hall 310B
Los Angeles, CA 90089
United States

Wei Xiong

Princeton University - Department of Economics ( email )

Princeton, NJ 08544-1021
United States

National Bureau of Economic Research (NBER)

1050 Massachusetts Avenue
Cambridge, MA 02138
United States

Liyan Yang

University of Toronto - Rotman School of Management ( email )

105 St. George Street
Toronto, Ontario M5S 3E6 M5S1S4
Canada

Yadong Huang

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Yong Li

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Xuan Luo (Contact Author)

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Yingju Ma

Luohan Academy ( email )

No. 556, Xixi Road, Z Space
Xihu District
Hangzhou, Zhejiang 310013
China

Shumiao Ouyang

Princeton University - Department of Economics ( email )

Feng Zhu

Ant Financial ( email )

Do you have a job opening that you would like to promote on SSRN?

Paper statistics

Downloads
93
Abstract Views
325
rank
333,766
PlumX Metrics