NBER Working Paper No. 23684
Issued in August 2017
Published: Avi Goldfarb & Catherine Tucker, 2019. "Digital Economics," Journal of Economic Literature, vol 57(1), pages 3-43. citation courtesy of
Digital technology is the representation of information in bits. This technology has reduced the cost of storage, computation, and transmission of data. Research on digital economics examines whether and how digital technology changes economic activity. In this review, we emphasize the reduction in five distinct economic costs associated with digital economic activity: Search costs, replication costs, transportation costs, tracking costs, and verification costs.