Hal Varian on Taking the Academic Approach to Business

Conversations with Tyler

Society & Culture, Education

4.8 • 2.4K Ratings

🗓️ 19 June 2019

⏱️ 57 minutes

🔗️ Recording | iTunes | RSS

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Summary

Before he became the Adam Smith of Googlenomics, Hal Varian spent decades as an academic economist, writing influential papers, a popular book about the information economy, and several textbooks that are still taught today. So how has his nearly twenty years in the business world affected what he’d write and teach now? Is learning Shephard’s lemma really that important anymore?

Tyler asks Hal these questions and more: why aren’t there more second-priced auctions — or prediction markets? How have the economics of sales changed with the internet? In what ways did his hiring criteria change between academia and business? What could we learn from the sack of Rome? When should economists avoid looking at the literature? How are we always eking out victory in the war on spam? And what are people least likely to understand about Google? Fear not — Hal has an answer for it all.

Read a full transcript enhanced with helpful links.

Recorded May 10th, 2019

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Transcript

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0:00.0	Conversations with Tyler is produced by the Mercatus Center at George Mason University,
0:08.4	bridging the gap between academic ideas and real-world problems.
0:12.5	Learn more at mercatis.org.
0:15.2	And for more conversations, including videos, transcripts, and upcoming dates, visit
0:20.4	ConversationsWithTyler.com.
0:30.0	Today I'm very happy to be here with Hal Varian, who is chief economist at Google
0:34.9	and emeritus professor at Berkeley.
0:36.9	How? Welcome.
0:37.9	Thank you.
0:38.7	Good to see you.
0:39.8	Now, one of your most famous articles it dates from 1980, and it's about a theory of the
0:44.8	economics of sales.
0:46.3	Ah.
0:47.0	And one motive for sales is price discrimination.
0:49.7	But what's the main alternative explanation of why sales happen?
0:53.5	Well, the claim is always overstocking or fashions changing or selling something at a loss
1:00.3	or remainder sale.
1:01.8	But even that's a bit like a price discrimination explanation.
1:04.6	It's a cose-indurable goods monopolist.
1:06.7	You're just unloading it at a loss.
1:08.4	Yeah.
1:08.9	But they're unloading at a loss because some new models come along and disappear.
	...

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