Article Analysis
Eduardo Porter writes that nowadays the American policy makers apply some ideas from the behavioral economics in order to increase effectiveness of the policies, but the new approaches cannot be applied to some categories of people. Specially designed communication strategies help to increase enrollment rates within various government led programs. However, the author states that reduction of poverty or increase of the retirement savings cannot be resolved by means of the minor changes. The cognitive practices are especially ineffective with the poor people who lack two things: the cognitive freedom and the money (Porter, 2016). The author concludes that there should be the other measures that could change the socio-economic situation for the better.
In general, behavioral economics is not the new field of economics and its ideas could contribute to the effectiveness of some federal and state level policies. When the budget is tight, the policy makers should understand how the households will make their decisions if the new policies will be based on the necessity to take a personal decision. It is also important to understand the possible inefficiencies, because all people think differently and sometimes act irrationally under stress. Therefore not everyone will benefit from the policy that will be developed by the behavioral economists. Nowadays there are a large number of the complex issues in the USA that need the development of the new policies. Undoubtedly, poverty is one of the greatest problems and cannot be resolved by means of the innovative experimenting and minor adjustments. The government should possess sufficient resources and the political will in order to make the structural changes related to the health care, retirement, poverty, etc. At the same time the practices suggested by the behavioral economists could be applied when dealing with less serious issues, for example education, transportation, environmental policies, etc. Economics has many theories and the governments should use the extensive academic research for the improvement of the existing policies.
Vindu Goel writes about the competition between Facebook and Google for the web-users that prefer to read the news on the internet. Facebook and Google have designed the new online features that will help to load the news articles more quickly than before and increase the number of the visits to the news web-sites. The higher traffic will bring more revenue from advertising and subscriptions. For instance at the moment The Times has 1.1 million digital-only subscribers (Goel, 2016). The publishing companies will continue to cooperate with Facebook and Google in order to develop the new ways of the content presentation and monetization.
The technological progress has been influencing the majority of the industries that depend on the demand driven economy. The new technologies especially influence the way people communicate with each other and look for the new information. The traditional mass media will have to break the routines and become digital in order to support the demand and supply of the information. However there are a number of challenges for the publishing companies. First and foremost, it is the issue of monetization. The people do not buy newspapers and magazines as much as before, so a special attention should be given to the e-commerce solutions that will generate the revenue. Secondly, the format of the media will have to be significantly changed in order to correspond to the new reading habits of the consumers. The giant hi-tech companies such as Google, Microsoft, Apple, Facebook, etc. will have a very large influence on the development of the American economy in the short term. The companies in the other industries have already realized that and apply the latest innovations in their business operations. As the result there are many hybrid market models that rely on the use of internet and e-commerce. For example, Medium, 9GAG, Reddit, Digg are the new types of media that can generate the large traffic and monetize. Therefore, the greater the innovations will be, the more opportunities the publishing companies will have in the new innovative environment.
References
Goel, Vindu. (24 February 2016). Google Joins Race to Speed Up Mobile Delivery of News
Articles. The New York Times. Web. Retrieved from
http://www.nytimes.com/2016/02/25/technology/google-joins-race-to-speed-up-
mobile-delivery-of-news-articles.html?_r=0
Porter, Eduardo. (23 February 2016). Nudges Aren’t Enough for
Problems Like Retirement Savings. The New York Times.
http://www.nytimes.com/2016/02/24/business/economy/nudges-arent-enough-to-
solve-societys-problems.html
