Exploring economic rents and algorithmic monopolies in the digital economy
Does value extraction cause economic stagnation and growing inequalities? The UCL Institute for Public Purpose (IIPP) and the Omidyar Network explore this question in their latest research project.
14 October 2020
About the project
IIPP is exploring how and why a large part of the value created within the society is extracted in the form ofÌý. These include theÌýÌýbut also non-financial firms who are becoming increasingly adept at extracting value from citizens, gaming regulations, and engaging inÌýrent-seeking motivated lobbying.
Most notable in recent years has been the enormous growth of digital platforms such as Amazon, Google, Facebook, and Apple. Despite the fact that we all enjoy services offered by these firms, their control overÌýÌýallows them to determine which products users will be able to choose. This gives them huge rent extraction opportunities against both producers and consumers, i.e. the productive sectors of the economy. A deeper understanding of how these actors extract value beyond their contribution to value creation will improve our understanding of rent-seeking in contemporary economies and how to regulate it.
In a new project, generously funded by theÌý, IIPP will develop a new theoretical approach on the rent dynamics in digital platforms, real estate, and finance. Given the importance of these sectors, our new lens will create important insights into the commonalities and unique aspects of each sector. As rents in digital platforms are largely overlooked, comparing and contrasting it with other rentier models is essential in understanding its nature. Therefore, IIPP will look at how algorithms can enhance rent extraction, and what new types of governance structures are needed to tackle this phenomenon.
Partner
Principal investigators
Mariana Mazzucato
Founder and Director
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iipp-director@ucl.ac.uk
Rainer Kattel
Deputy Director
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Josh Ryan-Collins
Head of Finance and Macroeconomics
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Giorgos Gouzoulis
Research Fellow
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Tim O'Reilly
Visiting Professor of Practice
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Ìý
Contact
Josh Ryan-Collins
Head of Finance and Macroeconomics
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