In the 21st century, Internet and Information Technology (IT) have become unavoidable parts of our life. With the development of Internet and IT, the traditional ways of economic activities of our society have been gradually replaced by digital economy. In contrast to the traditional economy where most economic activities occur physically, the economic activities of our society in the age of digital economy take place mostly virtually, in digital form. Such change is taking place in almost all aspects of our society, influencing activities of public sectors, private sectors, communities, and individuals. Based on economic theories, the Microeconomic Research Group (MRG) studies a variety of problems within digital economy, touching different sectors and aspects of our society.
- From private sectors perspective: it is challenging for companies to adapt their traditional business models to the more competitive and fast-changing business environment in the age of digital economy. There are various problems being studied by the MRG from this perspective, ranging from pricing goods on digital platform online dynamically based on consumers’ consumption data, to automated advertising auctions online based on sophisticated algorithms, to procurement and selling of digital goods on digital platform, and online marketing based on eye-tracking technology and other behavioral science methods.
- From individual’s perspective:, it is critical for consumers to react optimally to the fast-changing business models in the age of digital economy, especially when there are large quantities of information available online when shopping. An undergoing research work within the group focuses on how people learn, interpret information, and react differently when interacting with human vs when interacting with algorithms, a research relevant for the study and interpretation of consumer behavior, and for product design in a digital market.
- From public sectors perspective:, government agencies are also faced with different problems and challenges when providing services and public goods in the age of digital economy. With the development of IT and the availability of big data, there is need to reconsider how public goods and services can be more efficiently designed and provided. Microeconomic theories can be applied to this area with fruitful results. Problems in this regard include online platform design for providing public goods and services based on mechanism design theory, application of two-sided market theory in public health sector, and solving public resources allocation problems based on searching and matching theory.
If you are interested in knowing more about our research in this field, contact Assistant Professor Ryan Tierney.