APPLYING NEW TECHNOLOGY TOPICS AND IDEAS TO ECONOMICS

Ben O. Smith

Steve Jobs once said that Apple *existed at the crossroads of computer science and liberal arts*. The idea being that while computer scientists might build extremely functional software, few would be able to use it. Graphic designers might build beautiful software, but it may not be particularly practical. The best ideas come from combining good ideas from multiple disciplines. I hope, that in some small part, this document is consistent in spirit to this idea. There are a total of three projects in this document: 1. Simulating Confidence for the Ellison-Glaeser Index 2. Piracy, Awareness and Welfare in a Required Aftermarket 3. Estimating Consumer Demand for Information Attributes Using Twitter Data In the first project, we simulate a common index of industry localization. This allows analysts to be able to test if a particular industry is localized beyond statistical randomness. Our simulated critical values depend on the number of plants and underlying distribution of plant employment -- applying any constant value to all industries is inherently problematic. However, we make major contributions in two other areas. First, we take an idea from cryptography about the nature of random number generation and then we make our code available for free and easy to install, allowing anyone to apply, or even expand, our tool. In the second project, I use well-established ideas from behavioral economics to show that if consumers are somewhat uninformed about an upcoming payment (in the form of an aftermarket), manufactures may respond by subsidizing the primary market and profiting from the aftermarket. These results depend on the competitiveness of the primary market. In the last project, we discuss an advantageous property of Twitter: you can observe the demand curve for information directly. Using the tools we built, anyone can use this method to study consumer preferences using language analysis. Just like the first project, we make these tools available for free and easy to install. To the knowledge of the author, no-one has previously realized the demand exposing implications of Twitter much less made tools available for academia, government and industry.

APPLYING NEW TECHNOLOGY TOPICS AND IDEAS TO ECONOMICS

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