For many decades, the Coase theorem of the "Division of Labor" between organizations and markets has been the fundamental framework for understanding resource allocation and coordination mechanism. However, with the emergence of digital technology and platforms, traditional boundaries are disappearing before our very eyes and giving way to the facilitation of large-scale coordination with unprecedented participation. The application of digital transformation is changing the nature of work and the structure of the economy. While digital platforms have enabled innovations and new coordination mechanisms, they also pose challenges ahead.
The 2nd Frontier Dialogue of Luohan Academy focuses on the "New Coordination and Market Dynamics". Its very purpose is to provide a place for prominent scholars, industry experts, policymakers to exchange views and address critical issues in practice regarding this topic. In particular, we hope to initiate discussions on what digital transformation means for crucial issues such as economic growth, inclusion, innovation, and competition.
Michael Schwarz is Chief Economist at Microsoft. His Office of the Chief Economist has a team of economists and data scientists. In the dialogue, he shared his observation on the vanishing marginal cost in the digital era.
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