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.
We thank Andrey Fradkin and Kristina McElheran for helpful comments. We are grateful to the Sloan Foundation for its support of the NBER Digitization Initiative, which built the research community around which this review is based. The views expressed herein are those of the authors and do not necessarily reflect the views of the National Bureau of Economic Research.
Avi Goldfarb & Catherine Tucker, 2019. "Digital Economics," Journal of Economic Literature, vol 57(1), pages 3-43. citation courtesy of