
What is it: In the two linked articles, Freakonomics economists identify two ways where the new technological infrastructure can be (in the case of Google), or is being (in the case of Southwest Airlines) leveraged to challenge revenue streams and ways of doing business.
In the case of Southwest Airlines, when you order a ticket you are now asked how much of a refund you’d accept to be bumped to a later flight. As a solution to the common “over booking” phenomenon amongst airlines, this is a great way to prioritise passengers to bump at the minimum cost (both in terms of dollars and goodwill).
In the case of Google, a blogger challenges whether a “pay per impression” passed on to the audience is one way to add efficiency to the advertising market. Its similarity to the way online research has passed along some of the recruitment costs to panellist participants is remarkable and sensible, and pre-sages the emergence of an “attention economy”.
Why is it cool: By identifying and opportunistically taking advantage of these changes, leaders like Google and Southwest not only gain profit and competitive advantage, but they fundamentally change the way companies, third parties and end users interact. Truly an exciting time to be alive!
Where to find it: here and here!
Submitted by: John Cucka