A problem that's been very acute in the Internet, but actually precedes it, is a problem that a lot of things you want to sell don't have the standard economic textbook. And so the optimum is to set price equal to marginal cost. What's marginal cost in that? The cost of the next unit of producing the next unit. So I feel more on solid ground myself when I talk about sort of the economics of trying to support social media.
Economist and author Arnold Kling talks with EconTalk host Russ Roberts about the recent drama in the tech world--Elon Musk's acquisition of Twitter, the collapse of FTX, and the appearance of ChatGPT. Underlying topics discussed include the potential for price discrimination to make social media profitable, whether you could tell Jeff Bezos from Sam Bankman-Fried early on, and the role of human beings in the world of artificial intelligence.