I've been asked to do a Long Tail "high-order bit" presentation (a concept first seen at the Web 2.0 conference) at O'Reilly's Emerging Technology conference in San Diego in March. Chatting with one of the organizers today, I was given the choice to go deep or go broad. Rashly, I chose deep, offering this:
The Economics of the Long Tail: Forget macroeconomics. While you're at it, forget microeconomics, too. The really interesting new work is in nanoeconomics, or economic behavior in markets of a million niches far down the long tail of demand. From Pareto distributions to the rise of secondary markets, the ability to find big businesses in small sums is casting a new light on the dismal science.
Now a confession. At the time I thought nanoeconomics was my own neologism (much like "The Long Tail" itself), which I would have a few months to develop before presenting. That shouldn't have been a problem. There are, as it happens, a lot of really interesting, even surprising, economic effects that crop up in markets with a large number of low-volume transactions. And the economics of abundance are always fascinating. I won't say that visions of Oslo were dancing in my head, but it is a rich seam.
But I was naive. Of course someone had coined the term before me. Indeed, the problem is that there are at least four radically different definitions for nanoeconomics. There is, naturally enough, the economics of nanotechnology. Also, the economics of auctions and other micro-markets where the rules are important to determining the outcome. The economics of massively multiplayer games and virtual worlds. And, quite randomly, the microeconomics of children.
Still, Google only shows 223 hits for the word, so I figure there's still hope for me to reclaim it. I'll start with these topics:
--The economics of hits vs. niches.
--The economics of abundance.
--Zipf vs. Pareto vs. Powerlaw: why shape matters.
--The importance of transaction costs (Coase redux).
--The connection between long tails and secondary markets, from used goods to overstock items.
Proper economists (or even improper economists) are invited to offer thoughts on any and all of the above while I reteach myself statistics. As if.