©Lehr, 2007 Session: June 27 th 1:00-3:00pm Economics and its Applicability to FIND Research 1:00-1:15 Bill Lehr Importance of economics in network design 1:15-1:30 John Musacchio Market enabling architectures 1:30-1:45 Xiaowei Yang End-user choice in routing 1:45-2:00 Aparna Gupta From packet to contract switching 2:00-2:30 Andrew Odlyzko On the economic viability of network architecture 2:30-3:00 ** Group Discussion: Comments, Other thoughts, where to next… **

©Lehr, 2007 Importance of Economics in Network Design William Lehr Communications Futures Program Massachusetts Institute of Technology NSF FIND PI Meeting Washington, DC May 30-31, 2007

©Lehr, Goal for Session Introduction to how economics already being used in FIND Explore opportunities for addl. cross-community communication Engage outside research(ers) to advance FIND goals Identify who is interested (or should be) What to do next?? Explore how FIND computer science research community might better use/engage economics research in designing the NextGen Internet

©Lehr, Point of View… Economics is important to network architecture/design, and likely to get more so… (And, technical community will be more important to economic research framing policies for networks…) Pervasive computing 24/7 everywhere, unaware connected Economic interest in Internet will increase..design becomes strategic e.g., -- Standards wars (and industry research funding) -- Regulatory reform/liberalization -- Industry competitive dynamics, convergence, restructuring Internet matters to economy => Economists interested in Internet

©Lehr, Economics in the Net Economics is the social science that studies the production, distribution, and consumption of goods and services.social science distributiongoods and services (from Study of systems involving interactions of intelligent goal-oriented agents (rational), or Decision Science when you have multiple actors in richly constrained environment (optimization). Internet will include/be (increasingly) characterized by: -- Distributed Intelligence (AI-enabled, autonomous agents) -- Decentralized management (No single planner) -- Conflicting agent preferences/goals Economics will be in the NET

©Lehr, Interest outside FIND? Economists and others… Hal Varian (UofC, Berkeley) Jeff Mackie-Mason (Uof Michigan) Shane Greenstein (Northwestern) Preston McAfee (CalTech) Ross Anderson (Cambridge U) etc., etc…. Related areas of interest… Digital Rights Management (Greg Heileman) Antitrust Policy and Net Metrics (kc Claffy, Emanuele Giovanetti) Business models for ICT ValueChain (Charlie Fine, BT OpenReach) Secondary markets for RF spectrum and trading (Bill Lehr, Doug Sicker) etc. etc….

©Lehr, Some personal thoughts… Computer scientists get importance of economics for… Allocation of scarce resources via markets Price theory and decentralized coordination via markets (prices adjust to reflect value of resource) E.g., lots of useful work on QoS mechanisms, User choice in routing, Optimal resource pricing…. Game Theory is useful for strategic interaction Powerful analytic modeling tools E.g., lots of work on decentralized management (Nash Equilibria) in resource games (QoS, ad hoc networking, secure networking, etc.) Need to include in every research proposal that project will produce significant economic and social benefits…

©Lehr, But could use more attention to… Institutional (and transaction) economics Industrial Organization: interaction of firms and markets (Coase: why organize in firm instead of via market?) Political economy: strategic behavior among institutions (Weingast: why do bureacracies produce outcomes they do?) Law & Economics, Regulatory Economics, Welfare economics, etc. (see /subject_descriptors.html) /subject_descriptors.html Economic Incentives to participate complex/distributed systems Economics of Commons Information sharing/learning games (dynamic games) Non-standard economics…evolutionary, experimental, etc. Light-handed regulation what are the minimalist rules needed? -- engineer the ecosystem for regulator with limited tools where most decisions made by markets (technical design should help) -- e.g., how will public policy enforce architecture?

©Lehr, SURVEY…. -- How interested in economics are folks? -- What issues important? -- How much do folks know? -- What to do next Give us your if you want to be engaged on planning for future here Interested in answers & feedback on survey… use comment fields