Research
I am interested in information economics,the law and economics of information systems and policies, health economics, and experimental method. My specialties are censorship (e.g. anti-spam solutions, the Great Firewall of China, mathematical modelling), IT infrastructure, and open-content economics.
Publications
Journals
Benjamin Chiao, Josh Lerner, and Jean Tirole, "The Rules of Standard Setting Organizations: An Empirical Study". RAND Journal of Economics, Winter 2007. (Earlier versions appeared in: Harvard Negotiation, Organizations and Markets (NOM) Research Paper No 05-05. National Bureau of Economic Research Working Paper No 11156.)
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Abstract: This paper empirically explores the procedures employed by standard-setting organizations. Consistent with Lerner-Tirole (2004), we find (a) a negative relationship between the extent to which an SSO is oriented to technology sponsors and the concession level required of sponsors and (b) a positive correlation between the sponsor-friendliness of the selected SSO and the quality of the standard. We also develop and test two extensions of the earlier model: the presence of provisions mandating royalty-free licensing is negatively associated with disclosure requirements, and when there are only a limited number of SSOs, the relationship between concessions and user friendliness is weaker.
Books
Benjamin Chiao (Editor) (2009). The Great Firewall of China: The Law and Economics of Internet Censorship or 中国防火长城--互联网审查的法律经济学 (in Chinese). Forthcoming China Economic Publishing House (中国经济出版社). It is accepted into the All China Economics International Conference (Dec 2009, Hong Kong).
| The introduction and abstracts of each chapter are available here. The full book is available on request. | |
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Abstracts: 本书希望从法律和经济的角度，探讨一下几个问题:进行互联网审查的理论架构是什么？互联网审查的常用手段有哪些？互联网审查的法律依据有哪些？互联网审查的执行部门有哪些？此外，对比了国内外互联网审查制度，以及中国互联网审查所涉及国家法上的国家责任等问题。据了解， 有些反审查技术手段可以冲破几乎所有的审查，会相应产生一个成本较低的信息传播渠道，此冲破的成本变成纯消耗性的社会成本。即使在中国这样实行严格媒体管制的情况下，本书提到的相关理论可以推出审查制度有可能会失效，那就需要强化相应的法律手段。也许容易忽略的是，审查制度完全失效后，如果政府高层的管理体系的激励不对，经济学中的道德风险问题就可能出现。中层或基层官员还是会鼓励进行审查，甚至会制造出需要被审查的信息，因为没有审查，他们就有可能丧失工作的岗位，这就白白增加了社会成本。但是这些官员的审查行为是会受到约束条件影响的，如本书提到的一些国际普遍做法或者国际法等。如果激励是对的，中层或基层官员就会做出有利于社会稳定的审查。但究竟这种激励是否正确，还有待于学者们进行更多的实证研究。
Working Papers
A. Censorship
(i) The Great Firewall of China
See above.
(ii) Mathematical Modelling
Benjamin Chiao, Kai Yan and Xingbai Xu (2009). "Exchange Rate Models for Censorship Problems." It is accepted into the All China Economics International Conference (Dec 2009, Hong Kong).
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Abstracts: Censorship is prevalent but rarely studied by economists systematically. We found that setting bounds on information circulated shares striking similarities with the control of exchange rate using target zones. A wide range of scenarios is considered here as censorship where a censor, some intermediaries and receivers interact with each other strategically. A censor could be a government who suppresses a view, a mail service provider that filters spam messages, or a parent who turns off certain TV programs. Receivers could be citizens, mail readers, or kids. Intermediaries could be newspapers by formal or underground organizations, websites, or TV stations. We laid out a general framework and characterized some sufficient conditions, which allow receivers to obtain an unbiased estimation of the reality no matter where the bounds of censorship are and where the censored topic is in a single-dimensional space. Finally, we extended this baseline model to study how our main results would change when we allowed for different distributions of transmission errors, technological change in information circulation, more sophisticated intermediaries, and various belief adjustment processes.
(iii) Anti-Spam Mechanisms
Benjamin Chiao and Shi Guang (2009). “Voluntary Delay in Communication Buffers to Reduce Spam.”
Abstracts: Some communication methods are close to instantaneous but this is not entirely necessary. We evaluate a theoretical mechanism that provides an option for senders to voluntarily delay delivery of their messages (or at least the copies of them). The delayed messages will be stored in a buffer, in which malicious messages could be tagged. Recipients, on receiving a message, will be notified about whether there is a tag on the message (or on its copy), and the time length in which the messages have been stored in the buffer without being tagged. Senders could also signal by choosing the time in which the messages will be stored in the buffer. Recipients could make use of such time information to tell whether a message is likely to be malicious or not. Senders could elect to receive a notification when a message is received in the buffer with a name purported to be sent from them. Senders, being the most informative about the content of a message with their identity and a key victim of the presence of the spam, are then empowered to screen malicious messages.
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Sender's Side
Benjamin Chiao and Jeffrey MacKie-Mason (2006), “Using Uncensored Communication Channels to Divert Spam
Traffic”.
Under review.
(Proceedings of the 34th
Research Conference on Communication, Information and Internet
Policy. Net Institute Working Paper No. 06-20. Awarded the NET Institute grant.)
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Abstract: We offer a microeconomic model of the two-sided market for the dominant form of spam: bulk, unsolicited, and commercial advertising email. We adopt an incentive-centered design approach to develop a simple, feasible improvement to the current email system using an uncensored (open) communication channel. Such a channel could be an email folder or account, to which properly tagged commercial solicitations are routed. We characterize the circumstances under which spammers would voluntarily move much of their spam into the open channel, leaving the traditional email channel dominated by person-to-person, non-spam mail. Our method follows from inferring that there is a real demand for unsolicited commercial email, so that everyone can be made better off if a channel is provided for spammers to meet spam-demanders. As a bonus, the absence of filtering in an open channel restores to advertisers the incentive to make messages truthful, rather than to disguise them to avoid filters. We show that under certain conditions all email recipients are better off when an open channel is introduced. Only recipients wanting spam will use the open channel enjoying the less disguised messages and cheaper sale prices, and for all recipients the dissatisfaction associated with both undesirable mail received and desirable mail filtered out decreases.
B. The Economics of Open Contents/Source/Innovation
Benjamin Chiao (2009), “A Tort Model of Open Contents.” For submission to Journal of Law, Economics and Organization.
(Earlier versions presented at Academy of Management Conference 2006, and European Academy of Management Conference 2007.)
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Abstract: In some open contents processes such as open source software or Wikipedia, downstream licensing is royalty-free. Buyers, especially large vendors, can then become resellers to compete with the innovators. The innovators, however, can share the cost with the resellers to indemnify liability by, say, obtaining proper copyright permissions before using certain prior code. I compare the individual and social optimal levels of liability, redistribution, and care taken to avoid monetary losses in open contents. To have efficient quantities distributed, it is necessary for the vendors to bear more liability than the innovator when the marginal spillover effect and the innovators' per copy care cost are high relative to the vendors' per copy care cost. In the no liability to users case, efficient care levels cannot be obtained if the litigation costs are too high. In the no liability to the innovators and vendors case commonly used in open content licenses, efficient care levels cannot be achieved if there are non-zero litigation costs.
Benjamin Chiao (2009), “Modularity and Team Size in Open Content Experiments.” Under revision for resubmission to Management Science.
(An earlier version is distributed as a working paper at the MIT Free/Open Source Research Community. Earlier versions presented at Economic Science Association’s Meetings at Tuscon 2004 and at Hong Kong 2006. Working paper at the MIT Free/Open Source Research Community. Awarded the Rackham Discretionary Fund.)
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Abstract: This paper reports experimental results on open contents. We found that large teams in general were associated with a higher free-riding level than small teams, and free-riding was more severe when large teams work in a non-modular production environment. Free-riding resulted in the removal of a signaling function of price for the difficulty levels of tasks. However, this removal was not sufficient to lead to the catastrophic outcome of zero payoff. Efficiency was higher in the modularity treatment irrespective of team size. Small teams were more efficient in the non-modularity treatment. We have not directly investigated what prevented the catastrophic outcomes but spillover was significantly higher in the non-modularity treatment. Here are some implications for managers concerning efficiency: if the production function is restricted to be non-modular, reduce the team size; with no such restriction, always choose the modular production function.
Benjamin Chiao (2003), "An Economic Theory of Free and Open Source Software: A Tour from Lighthouse to Chinese-Style Socialism", Proceedings of the International Conference on Open Source 2003. The latest version is distributed as a working paper at the MIT Free/Open Source Research Community.
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Abstract: The theory is that free and open source software is private property under the guise of common property. Such software is distributed mostly under the GNU General Public License. The intents in The GNU Manifesto suggest striking similarities between this license and communism. The resulting economic properties, however, are similar to those of Chinese-style socialism: both resulted from an increased separation of legal and economic ownership. The phenomenal growth of China in the last twenty five years and of such software in the past few years could be attributed to such separation.
In Progress
Benjamin Chiao (and colleagues in the Peking University China Center for Pharmaeconomics & Outcome Research). “The Effects of New IT Infrastructure on Medical Care in the Sichuan Earthquake Area.”
Benjamin Chiao (and colleagues in the Tsinghua University Network Research Center) on various Internet infrastructure markets
Yujin Cao, Benjamin Chiao, Xiaolin Wang, Hui Xu, Xingbai Xu (2009). “Vertical Integration and Plant Variety Intellectual Property Protection in China.”
Abstract: This paper investigates the influence of intellectual property infringement likelihood on companies’ choices of vertical integration. Using the data from the Plant Variety Protection Office ofthe Ministry of Agriculture and of Forestry Administration, we measure infringement likelihood based on three factors of difficulty for unauthorized copy. The regression results from a generalized ordered logit model indicate that those companies with seed products having a higher infringement likelihood are more vertically integrated. We also build a simple model, which firms use vertical integration as a remedy in the absence of effective legal protection for innovations.
Benjamin Chiao and Shi Guang. “An Experimental Study of Anti-Spam Communication Buffers.”
Benjamin Chiao. “An Economic Analysis of the Copyright Opt-Out Mechanism in Google Book Search.”
Benjamin Chiao. “An Experimental Study of Parallel Music Progression.”
Unpublished
Benjamin Chiao (1999). “The Monetary Rule of Hong Kong”. Class paper under the supervision of Professor Mick Devereux.